Pending Sales – California versus the Nation
By: Robert A. Kleinhenz, Ph.D., Deputy Chief Economist 

The NATIONAL ASSOCIATION OF REALTORS® released their pending sales index for November 2009 on January 5, 2010. News reports mentioned that the seasonally adjusted number of pending home sale was lower in November, triggering a lot of concern about the health of the US housing market.

The figure below shows the number of properties (existing single family homes) under contract in California, a similar measure to pending home sales.

                      Click on graph for larger view

Since the California numbers shown are not seasonally adjusted, the following comparisons are
made using US and US West Region numbers that are non-seasonally adjusted.

The month-to-month declines in the US were driven mainly by declines in the Northeast (-42.9%) and Midwest (-36.3%). As the graph shows, contracts typically decline in November and December, consistent with the off peak part of the year, and then pick up early in the following year. So the month-to-month decreases were expected.

In month-to-month terms, California fared better than the US and US West Region. In year-to-year terms, California showed the weakest gains. However, California’s existing home market has been ahead of the US curve in terms of activity since late 2007, and California sales were relatively stronger than US sales in November 2008, explaining why it registered a smaller year-to-year gain for November 2009 compared to the US and US West.  

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