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The California Association of Realtors said that the number of pendings has been falling.

They don’t give any other details or interpretations, so what will casual readers conclude?

The market must be coming apart!

Thanks C.A.R.!

But because pendings and sales are directly related to inventory, we must consider the impact of having fewer homes for sale.  Look how dramatically the inventory has dropped recently, and yet we still had a good amount of sales, relatively:

NSDCC Detached-Homes

Year
Total Listings, Jan 1 to May 31
Total Sales, Jan 1 to May 31
Sales/Listings
2018
2,222
1,112
50%
2019
2,273
1,099
48%
2020
1,855
871
47%
2021
1,780
1,322
74%
2022
1,349
946
70%

In 2021, the frenzy was so hot that every house was selling, and the lower inventory wasn’t as obvious because the sales count was tremendous. But now that the number of homes for sale has really dried up, the impact on pendings and sales is more noticeable – at least for those who are willing to look that far.

This year has been really great! The rest of the year will probably be less great. It might even get back to 2018-2019 levels, which is fine – that’s the way it always was.  We could handle worse if we had to.

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