March 2015 Pending Home Sales Index

Double-digit gain in annual pending home sales suggests market will continue its upswing coming months, C.A.R. reports

Pending sales in San Francisco Bay Area, Southern California, and Central Valley regions jump.

LOS ANGELES (April 22) – California pending home sales jumped in March to record three straight month-to-month and year-to-year sales increases, portending a solid upcoming spring home-buying season, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. 

Pending home sales in the San Francisco Bay Area, Southern California, and Central Valley regions also posted back-to-back, double-digit monthly gains compared to February.

Pending home sales data:

• California pending home sales propelled higher in March, with the Pending Home Sales Index (PHSI)* increasing 16.3 percent from a revised 111.9 in February to 130.2, based on signed contracts.  The month-to-month increase was essentially unchanged from the long-run average increase of 16.8 percent observed in the last seven years.
• Statewide pending home sales were up 13.8 percent on an annual basis from the 114.4 index recorded in March 2014.  The yearly increase was the second largest since April 2009 and was the fourth consecutive annual gain.
• San Francisco Bay Area’s PHSI stood at 146.6 in March, up 17.4 percent from 124.8 in February and up 7.2 percent from 136.7 percent in March 2014.
• Pending home sales in Southern California rose 16.7 percent in March to reach an index of 115.4, up 15 percent from 100.3 in March 2014.
• Central Valley pending sales increased 21.7 percent from February to reach an index of 100.8 in March, up 15.3 percent from 87.5 in March 2014. 

Equity and distressed housing market data:

• The share of equity sales – or non-distressed property sales – climbed in March to make up 91 percent of all home sales, up from 89.1 percent in February and 87.5 percent in March 2014. Equity sales have been more than 80 percent of total sales since July 2013 and have risen to or near 90 percent since mid-2014.
• Conversely, the combined share of all distressed property sales fell in March, down from 10.9 percent in February to 9 percent in March.  Distressed sales made up 12.5 percent of total sales a year ago. Thirty-four of the 43 counties that C.A.R. reported showed month-to-month decreases in their distressed sales shares, with Mariposa having the smallest share of distressed sales at 0 percent, followed by San Mateo (1 percent) and Marin, San Francisco, and Santa Clara (all at 2 percent).  Plumas County had the highest share of distressed sales at 27 percent, followed by Siskiyou (24 percent), and Kings (21 percent). 
  March REALTOR® Market Pulse Survey**:

In a separate report, California REALTORS® responding to C.A.R.’s March Market Pulse Survey saw slightly more multiple offers than the previous month and an increase in floor calls, listing appointments, and open house traffic.  The Market Pulse Survey is a new monthly online survey of more than 300 California REALTORS® to measure data about their last closed transaction and sentiment about business activity in their market area for the previous month and the last year.

• In a sign of sellers pricing their homes more in line with market conditions, the percentage of properties selling above asking price dropped from its peak in March 2014 at 40 percent to 25 percent a year later. However, the share was up from the lowest point of 16 percent in February.  Nearly half of homes (48 percent) closed below asking price.
• The premium paid over asking price declined in March, indicating sellers’ and buyers’ expectations are more in line. In March, homes that sold above asking price sold for 7.5 percent above asking price, down from 10 percent in February, and essentially flat from 7.6 percent in March 2014.
• Homes that sold below asking price sold for 11 percent below asking price in March, unchanged from February. The number of homes that had listing price reductions dropped from 31 percent in February to 22 percent in March.
• Sixty-three percent of properties received multiple offers in March, up from 61 percent in February but down from 74 percent a year ago.
• The average number of offers per property in March was 2.6, unchanged from February but down from 3.2 a year ago.
• Floor calls, listing appointments, and open house traffic were all up in March, compared to both the previous month and year, suggesting the market will continue its upswing in closed escrow sales.

Graphics (click links to open): 

• Pending home sales by region.
• Transactions closing below asking price.
• Properties receiving multiple offers.
• Listing price reductions.

Single-family Distressed Home Sales by Select Counties
(Percent of total sales)

Type of Sale	March 2015	Feb. 2015	March 2014
Equity Sales	91.0%	89.1%	87.5%
Total Distressed Sales	9.0%	10.9%	12.5%
REOs	4.8%	6.0%	5.4%
Short Sales	3.8%	4.5%	6.6%
Other Distressed Sales (Not Specified)	0.4%	0.5%	0.5%
All Sales	100%	100%	100%

Single-family Distressed Home Sales by Select Counties
(Percent of total sales)

County	Mar-15	Feb-15	Mar-14
Alameda	4%	6%	6%
Amador	9%	0%	30%
Butte	13%	15%	19%
Calaveras	6%	13%	18%
Contra Costa	5%	7%	9%
El Dorado	10%	13%	15%
Fresno	14%	16%	22%
Glenn	14%	36%	38%
Humboldt	12%	14%	17%
Kern	NA	NA	17%
Kings	21%	22%	28%
Lake	9%	18%	27%
Los Angeles	8%	10%	13%
Madera	11%	14%	14%
Marin	2%	3%	6%
Mariposa	0%	0%	27%
Mendocino	15%	17%	14%
Merced	12%	17%	17%
Monterey	7%	9%	10%
Napa	5%	8%	13%
Orange	4%	6%	7%
Placer	7%	8%	11%
Plumas	27%	16%	40%
Riverside	12%	13%	14%
Sacramento	13%	15%	17%
San Benito	8%	7%	9%
San Bernardino	14%	15%	21%
San Diego	5%	7%	4%
San Francisco	2%	4%	5%
San Joaquin	15%	16%	20%
San Luis Obispo	6%	6%	7%
San Mateo	1%	1%	4%
Santa Clara	2%	2%	5%
Santa Cruz	4%	5%	9%
Shasta	14%	23%	20%
Siskiyou	24%	29%	28%
Solano	11%	15%	19%
Sonoma	5%	11%	9%
Stanislaus	14%	14%	15%
Sutter	11%	17%	23%
Tulare	18%	21%	21%
Yolo	7%	14%	14%
Yuba	15%	23%	23%
California	11%	12%	15%

Luxury Home Hotspots

Wealthy buyers typically look to leisure-rich hotspots such as Hawaii and Florida for second homes, which they often buy into once they retire. But that’s changing, the report suggests that younger home buyers are not waiting until they retire to live where they want to. Instead, high-net-worth individuals are showing more mobility and flocking to areas once pegged as resort or second-home markets, at a time when advances in technology, transportation, and communication are enabling a “live anywhere” working-age population, the report says.

“People conduct their business digitally or on the Internet, and my clients are doing it more and more,” says Jan Kabbani, an independent sales associate with Coldwell Banker Residential Brokerage in Phoenix. “I’m seeing lots of wealthy families and couples moving here for the amenities of the area, many of them in their 40s and far from being retired, coming here from California, Seattle, the Midwest and even Canada.”

According to the report, the following ZIP codes had the highest number of closed sales of homes in the $1-million-plus range from January 2014 to December 2014:

1. 90266: Manhattan Beach, Calif. (425 sales)
2. 84060: Park City, Utah (397 sales)
3. 94010: Burlingame, Calif. (385 sales)
4. 92037: La Jolla, Calif. (371 sales)
5. 94025: Menlo Park, Calif. (359 sales)

What’s more, these ZIP codes boasted the highest number of closed luxury sales in the past year in the $5-million-plus category:

1. 90210: Beverly Hills, Calif. (104 sales)
2. 81611: Aspen, Colo. (68 sales)
3. 90265: Malibu, Calif. (48 sales)
4. 34102: Naples, Fla. (47 sales)
5. 94027 Atherton, Calif. (46 sales)

Sales in the ultra-luxury housing sector—the $10-million-plus category—more than doubled in four U.S. cities: Aspen, Colo.; Atherton, Calif.; Naples, Fla.; and Santa Barbara, Calif. Here are the top ZIP codes for closed luxury sales in the $10-million-plus range:

1. 90210: Beverly Hills, Calif. (35 sales)
2. 81611: Aspen, Colo. (25 sales)
3. 94027: Atherton, Calif. (14 sales)
4. 90265: Malibu, Calif. (14 sales)
5. 90077: Los Angeles, Calif. (12 sales)

Source: “Luxury Market Report: Spring 2015,” 

Home Sales Surge to 18-Month High

DAILY REAL ESTATE NEWS | THURSDAY, APRIL 23, 2015

Housing Market Snapshot for March

• Days on the market:Properties typically stayed on the market for a shorter time in March – 52 days versus 62 days in February. Short sales in March were on the market the longest, at a median of 165 days in March; foreclosures sold in 56 days; and non-distressed homes averaged 51 days. Forty percent of homes sold in March were on the market for less than a month.
• All-cash sales represented 24 percent of transactions in March, down from 33 percent a year ago. Individual investors, who account for many cash sales, purchased 14 percent of homes in March, a drop from 17 percent in March 2014.
• Distressed sales accounted for 10 percent of sales in March, down from 14 percent a year ago. Foreclosures sold for an average discount of 16 percent below market value in March, while short sales were discounted 16 percent.

Data By Region

• Northeast: Existing-home sales rose 6.9 percent in March to an annual rate of 620,000, and are 1.6 percent above a year ago. Median price: $240,500, 1.6 percent below a year ago
• Midwest: Existing-home sales jumped 10.1 percent to an annual rate of 1.2 million, and are now 12.1 percent above a year ago. Median price: $163,600, up 9.7 percent from a year ago
• South: Existing-home sales climbed 3.8 percent to an annual rate of 2.19 million, and are now 11.7 percent above March 2014. Median price: $187,900, up 9.3 percent from a year ago
• West: Existing-home sales rose 6.3 percent to an annual rate of 1.18 million, and are now 11.3 percent above a year ago. Median price: $305,000, which is 8.3 percent above year-ago levels

The spring home sale season has finally sprung. Existing-home sales surged to the highest annual rate since September 2013. Also: More homes went up for sale, relieving some inventory constraints, according to the National Association of REALTORS®’ latest report.

The Midwest posted the largest gains in home sales, but all regions saw a rise in March and are above their year-over-year sales pace, NAR reports.

“After a quiet start to the year, sales activity picked up greatly throughout the country in March,” says Lawrence Yun, NAR’s chief economist. “The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years.”

Existing-home sales—reflecting completed transactions for single-family homes, townhomes, condos, and co-ops—rose 6.1 percent in March month-over-month to a seasonally adjusted annual rate of 5.19 million—the highest annual rate in 18 months. Sales are now 10.4 percent above a year ago.

Home prices also climbed last month, with the median existing-home price for all housing types reaching $212,100 in March—7.8 percent higher than March 2014. That is the largest price increase since February 2014, when prices jumped 8.8 percent year-over-year.

More homes were on the market nationwide in March, with unsold inventories climbing 5.3 percent to 2 million existing homes available for sale, representing a 4.6-month supply. Inventories are now 2 percent above year-ago levels.

“The modest rise in housing supply at the end of the month despite the strong growth in sales is a welcome sign,” Yun says. “For sales to build upon the current pace, home owners will increasingly need to be confident in their ability to sell their home while having enough time and choices to upgrade or downsize. More listings and new-home construction are still needed to tame price growth and provide more opportunity for first-time buyers to enter the market.” The share of first-time buyers in March was 30 percent (historically, they represent a 40 percent share).

Source: National Association of REALTORS®

The Spa-Like Bathroom: 10 Top Trends for 2015

Photo Credit: National Kitchen & Bath Association

Just like the kitchen, contemporary designs are growing in popularity in bathroom remodels. These contemporary touches in the bathroom equate to clean and open designs, with floating vanities and freestanding tubs.

Last week, at Styled Staged & Sold, we highlighted the top 10 trends for the kitchen this year. This week, we focus on the National Kitchen & Bath Association’s latest trend report on what’s driving bathroom design in 2015.

Here are the top 10 overall bathroom design trends NKBA designers expect to be hot this year:

1. Clean, white, contemporary designs
2. Floating vanities
3. Open-shelving
4. Electric heated floors
5. Purple color schemes
6. Trough sinks
7. User experience (ease of use and low maintenance) and accessibility features
8. Extra amenities (like steam showers, anti-fog mirrors, lighted showers, and shower seats)
9. Innovative storage (such as drawer pullouts and rollouts to hold hair styling equipment)
10. Showers and freestanding tubs

Most popular colors: White and gray are the dominant colors for bathrooms. Half of designers expect to see gray growing in 2015, and several designers also mentioned the growing popularity of purple, lavender, and lilac tones gaining steam in bathroom designs. For fixtures, white continues its dominance.

Traditional Bathroom by Saratoga Springs Design-Build Firms Witt Construction

Out of style: Jetted tubs, whether whirlpool or air, are decreasing in popularity, according to NKBA’s report. “People are moving away from jetted tubs to more classic soaking tubs,” says Bill Donohoe with Donohoe Design Works in the Los Angeles area. Also, beige fixture colors are increasingly dropping in popularity.

By Melissa Dittmann Tracey, REALTOR® Magazine

The Contemporary Kitchen: 10 Top Trends for 2015

Photo Credit: National Kitchen & Bath Association

Contemporary is the buzzword when it comes to kitchen designs this year, according to the National Kitchen & Bath Association. Streamlined designs, eclectic touches, and multiples of appliances lead the trends, according to NKBA’s 2015 forecast.

Here are the top 10 overall kitchen design trends expected to be hot this year, according to NKBA’s report:

1. Clean with an overall contemporary feeling: A fusion of styles and multiple colors in one kitchen
2. European-styled cabinets
3. Multiples of appliances in one kitchen (most notably two dishwashers, like a dishwasher and a dishwasher drawer, or the addition of a refrigerator/freezer)
4. The rise of steam ovens
5. Furniture-like pieces (such as furniture-styled dry bars)
6. Outdoor kitchens
7. Fewer standard kitchen tables, replaced by counters or tall gathering tables
8. TVs and docking stations (many kitchens have desks or home office areas as well as flat-screen televisions and docking/charging stations)
9. Wine refrigerators
10. A focus on the user experience, from easy maintenance to accessible design

Contemporary Kitchen by Geneva Kitchen & Bath Designers Past Basket Design

Most Popular Colors: The most common color scheme for kitchens: White, followed by gray, according to NKBA. About a third of NKBA remodelers also said they did black or blue kitchens in 2014. Kitchens in green tones were also gaining in popularity. Designers are increasingly reporting an appetite for kitchens with multiple color schemes.

“I am seeing lots of white painted kitchen perimeters with espresso stained islands and dark stained kitchen perimeters with light colored painted islands,” says Christine Shorr with Morris Black Designs in Allentown, Pa. “Lots of painted white kitchens with light countertops and espresso islands and painted gray cabinets.”

Out of style: Country/rustic, Tuscan and Provincial looks with distressed finishes, as well as color schemes in reds, bronzes, and terra cottas are on their way “out” in the kitchen.

By Melissa Dittmann Tracey, REALTOR® Magazine 

Asian Investors Lead International Commercial Investment in U.S. and Canada, says NAR Survey

WASHINGTON (March 12, 2015) – International investment in commercial real estate is dominated by Asian interests in both Canada and the U.S., according to a new surveyfrom the Richard J. Rosenthal Center for Real Estate Studies at REALTOR® University and the National Association of Realtors®.

The survey found that 47 percent of Canadian respondents and 41 percent of those in the U.S. indicated that their international clients were from Asian countries.

“Commercial real estate has become a global industry, and Realtors® from across the U.S. and Canada now regularly serve clients from all over the world,” said NAR PresidentChris Polychron, executive broker with 1^st Choice Realty in Hot Springs, Ark. “This survey proves the fact that while all real estate is local, not all investors are local.”

The survey was done in collaboration with the Canadian Real Estate Association and with assistance from the CCIM Institute and Institute of Real Estate Managers. Nearly 3,000 Realtors® answered questions about their international commercial clients and the perceived changes they see in the demand for and utilization of office space.

According to the survey, 45 percent of Realtors® who practice commercial real estate in Canada noted an increase in international clients. Similarly in the U.S., more than a third of responders, 36 percent, observed an increase in international investment.

The survey found that in the U.S., 22.5 percent of international clients came from Europe, 21 percent from Latin America and 20 percent from the Middle East. In Canada, Realtors® said 18 percent of international commercial real estate investment came from the Middle East, 17 percent from Europe and 5 percent from Latin America. It is important to note that the heaviest cross-border investment in commercial real estate continues to be between the U.S. and Canada.

International investors brought significant capital into North America, nearly $13 billion in the latter half of 2014. Investors from Asia invested $5.7 billion in real estate, $4.8 billion came from Europe, $1 billion came from Oceania and $390 million came from Latin American investors. 

The survey also found a changing demand for office space in both the U.S, and Canada. Commercial clients are seeking more flexible office spaces, reducing the amount of personal space for workers and increasing the amount of communal space; 40 percent of Canadian respondents and 45 percent in the U.S. said their clients are looking for more open space in their offices.

The location of offices spaces is also seeing a shift. In Canada, a majority of investors is looking at property in metropolitan areas with populations of more than 1 million. In the U.S., however, investors have begun moving away from larger markets into secondary and tertiary markets; more than one-third of U.S. respondents reported investors are interested in markets with populations less than 750,000.   

Highlights from the report are available at www.realtoru.com/real-estate-studies/current-research-programs/international-commercial-real-estate-investment. A full copy of the report is available to news media upon request.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

The Richard J. Rosenthal Center for Real Estate Studies is a think tank/real estate research laboratory designed to provide timely hands-on and results oriented real estate data and analysis relevant to industry trends and policy issues from a practical standpoint and provides high quality practical research that raises the credibility and profile of Realtors®. 

The Canadian Real Estate Association is one of Canada’s largest single-industry trade associations, representing more than 109,000 Realtors® working through some 90 real estate Boards and Associations.

Real Estate Likely to Ride a 3-Year Wave

The real estate industry is expected to strengthen this year and continue to get stronger through 2017, according to a new report released from the Urban Land Institute Center for Capital Markets and Real Estate, which is based on a survey of the industry’s top economists and analysts.

Read more: NAR's 4 Predictions for the Commercial Market

Survey respondents said that the residential, single-family housing sector remains in recovery mode and economists predict that housing starts will rise from 647,000 in 2014 to 700,000 in 2015; to 815,000 in 2016; and 900,000 by the end of 2017.

Economists predict that existing home prices will rise through 2017 -- rising 5 percent this year; another 4 percent in 2016; and by 4 percent in 2017.

"In summary, almost all U.S. real estate participants would be very pleased if the future unfolded as predicted by the ULI consensus forecast," says ULI leader William Maher, director of North American strategy for LaSalle Investment Management in Baltimore. "The forecast represents almost the perfect combination of strong economic and property market fundamentals, combined with an orderly wind-down of monetary stimulus."

Although an economic downturn could throw off these predictions, as well as interest rate spikes or oversupplies, "real estate pros predict three more years of smooth sailing for U.S. real estate," Maher adds.

Survey respondents were also upbeat with their forecasts for the commercial market, including: 

• Office sector: Respondents expect rental rates in office space to rise 4 percent this year, 4.1 percent in 2016, and 3.5 percent in 2017.
• Apartments: Respondents expect rental rates continue to push upward, rising by 3.5 percent in 2015, 3 percent in 2016, and 2.7 percent in 2017.
• Retail: Analysts expect that rental rates in the retail sector to rise by 2 percent in 2015, 3 percent in 2016, and 2.9 percent in 2017.
• Industrial/warehouse: Analysts expect rental rates in the warehouse sector to rise by 4 percent this year, 3.8 percent in 2016, and 3.1 percent in 2017.

Source: Urban Land Institute

What's Trending Now in Real Estate

Home prices are surging

Price growth is only increasing, due to a lack of inventory in some markets. According to Lawrence Yun, NAR chief economist "Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels." Buyers in many areas need to be prepared for an increased amount of competition due to low housing inventory this spring.

Mortgage rates hold steady

30-year fixed rate mortgages remain at 3.7 percent, but that is likely to change. "Low mortgage rates are a welcome sign for those in the market to buy a home this spring season and will help to support homebuyer affordability," says Len Kiefer, deputy chief economist at Freddie Mac. 

Sellers are needed

It continues to be a seller's market, as total housing inventory at the end of February increased just 1.6 percent to 1.89 million existing homes available for sale. For the second month in a row, unsold inventory is at a 4.6-month supply, below what is considered normal for a healthy market.

Buyers want move-in-ready properties

Despite the low housing inventory, buyers are picky about the condition of properties for sale and expect homes to be move-in-ready. "Buyers don’t want to assume any risk with properties that need work, particularly first-time buyers with limited cash resources," says Budge Huskey, chief executive officer at Coldwell Banker Real Estate.

Foreclosures keep slipping

After peaking in 2006, foreclosures are returning to significantly low levels across the country. "Given that August 2006 was the peak of the housing bubble, this eight-and-a-half year low in foreclosure activity is a significant milestone and a sign that nationwide foreclosure activity is on track to return to historic norms this year," says Daren Blomquist, vice president at RealtyTrac.

Trending in 2015

21 Hot Housing Trends for 2015

Designers, Builders Reveal Hot Trends for 2015

Investor slowdown

Competition between regular buyers and investors is decreasing. Home prices are getting so high that the share of home sales to investor clients recently reached a four year low.

Buying: it's cheaper than renting

A recent study from NAR found that rents are on the rise in many parts of the country. "In the past five years, a typical rent rose 15 percent while the income of renters grew by only 11 percent," says Yun. A recent study also showed that renters are spending around 30 percent of their wages on rent, compared to homebuyers who spend below 15 percent of their wages on mortgage payments.

A focus on first-time buyers

New programs from Fannie Mae and Freddie Mac seek to make it easier for first-time borrowers to buy a home. They recently introduced 3 percent down payment mortgages-- the first time down payments have been this low on Freddie Mac loans in nearly five years. Besides this, Freddie Mac launched the "Our Home Possible Advantage Program", which is aimed at supporting first-time buyers by allowing no minimum from borrowers in contributions, which means that parents or relatives now can cover 100 percent of the down payment through gifts.

Going green

Millennial clients are providing the push for home builders to downsize. According to the National Association of Home Builders, the average size of a new home is 10 percent less than the typical home five years ago. Younger clients are leading the push for green and energy efficient homes, according to a recent study by NAR.

Source: "9 Real Estate Trends to Watch in 2015," The Fiscal Times (March 27, 2015)