The California Pending Home Sales Index Rose in January
ByBy: Oscar Wei, senior research analyst
Mar 03, 2011
When a seller accepts a sales contract on a property, it is recorded into a Multiple Listing Service (MLS) as a “pending home sale.” The majority of pending home sales usually become closed sale transactions one to two months later. Using pending home sales statistics, C.A.R. recently created a forward looking indicator that offers solid information on future changes in the direction of the housing market. C.A.R.’s pending home sales information is generated from a survey of more than 70 associations of REALTORS® and MLSs throughout the state, representing over 70 percent of the market. The year 2008 was used as the benchmark for the pending homes sales index, and an index of 100 reflects the average level of contract activity during 2008.
According to the index based on contracts signed in January 2011, pending home sales in California jumped from the December’s index of 82.4 to 93.6 in January. The monthly increase suggests that closed escrow sales should rise in the coming months, which is typically the time when the housing market begins to ramp up toward the peak season that starts in May.
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