Pending home sales declined in December but have stayed above year-ago levels for 20 consecutive months, according to data from the National Association of Realtors®.
The Pending Home Sales Index,* a forward-looking indicator based on contract signings, fell 4.3 percent to 101.7 in December from 106.3 in November but is 6.9 percent higher than December 2011 when it was 95.1. The data reflect contracts but not closings.
Lawrence Yun , NAR chief economist, said there is an uneven uptrend. “The supply limitation appears to be the main factor holding back contract signings in the past month. Still, contract activity has risen for 20 straight months on a year-over-year basis,” he said. “Buyer interest remains solid, as evidenced by a separate Realtor® survey which shows that buyer foot traffic is easily outpacing seller traffic.”
Yun said shortages of available inventory are limiting sales in some areas. “Supplies of homes costing less than $100,000 are tight in much of the country, especially in the West, so first-time buyers have fewer options,” he said. “We expect a seasonal rise of inventory in the spring to help, but a seller’s market may be developing.”
Much of the West is already a seller’s market for homes priced under a million dollars. On the Westside, we continue to see multiple offers on all properties, especially entry level condominiums, and mid-range houses. Neighborhood such as Mar Vista, Culver City, and Westwood are experiencing strong and continued demand, with as many as 50 offers on a single property.