California Pending Home Sales Jump in March; Short Sales Drop to Lowest Level in Nearly Six Years, C.A.R. Reports

Business Wire

LOS ANGELES--(BUSINESS WIRE)--

In an encouraging sign for a healthier spring home-buying market, California pending home sales increased more than usual and rose to the highest level in eight months. Meanwhile, the share of short sales has fallen to levels last observed in 2008, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

Pending home sales data:

  • California pending home sales climbed 17.8 percent in March, with the Pending Home Sales Index (PHSI)* rising from 97.1 in February to 114.4 in March, based on signed contracts. The March index was the highest since July 2013.
  • Pending sales were down 9.9 percent from the revised 126.9 index recorded in March 2013. The year-over-year decline in the PHSI has been tapering over the past few months. Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

Distressed housing market data:

  • The share of equity sales – or non-distressed property sales – has been increasing steadily over the past year. The share of equity sales increased to 87.6 percent in March, up from 85 percent in February. Equity sales stabilized over the past several months but have started rising again as the spring home-buying season takes off. March marks the ninth straight month that equity sales have been more than 80 percent of total sales. Equity sales made up 71.8 percent of sales in March 2013.
  • The combined share of all distressed property sales continued to drop in March, primarily due to declines in both short sales and REO sales. The share of distressed property sales fell from 15 percent in February to 12.4 percent in March. Distressed sales continued to be down by more than a half from a year ago, when the share was 28.2 percent.
  • Thirty of the 38 reported counties showed a month-to-month decrease in the share of distressed sales, with Alameda, Marin, San Diego, San Mateo, and Santa Clara counties registering the smallest share. Alameda, Madera, Marin, Monterey, Orange, Riverside, San Luis Obispo, and San Mateo counties experienced the greatest year-to-year improvement in fewer distressed property sales.
  • Of the distressed properties, the share of short sales dropped to levels last observed in March 2008 at 6.6 percent, down from 8.2 percent in February. March’s figure was nearly a third of the 17.2 percent recorded in March 2013.
  • The share of REO sales also fell in March to 5.4 percent, down from 6.3 percent in February. REOs sales are now about half what they were a year ago, when REOs made up 10.6 percent of all sales in March 2013.
  • Active listings across all property types, especially in equity properties, fell during March, tightening housing supply conditions. The Unsold Inventory Index for equity sales dropped from 4.8 months in February to 4 months in March. The supply of REOs dipped from 3 months in February to 2.8 months in March, and the supply of short sales slipped from 5 months in February to 4.7 months in March.

Charts (click link to open):

 

Share of Distressed Sales to Total Sales

(Single-family)

 
Type of Sale      

March
2014

   

Feb.
2014

   

March
2013

Equity Sales       87.6%     85.0%     71.8%
Total Distressed Sales       12.4%     15.0%     28.2%
REOs       5.4%     6.3%     10.6%
Short Sales       6.6%     8.2%     17.2%
Other Distressed Sales (Not Specified)       0.5%     0.6%     0.4%
All Sales       100.0%     100.0%     100.0%
             
 

Single-family Distressed Home Sales by Select Counties

(Percent of total sales)

 
County    

March
2014

   

Feb.
2014

   

March
2013

Alameda     6%     9%     19%
Amador     30%     19%     29%
Butte     19%     16%     24%
Contra Costa     9%     10%     16%
El Dorado     15%     17%     29%
Fresno     22%     29%     41%
Humboldt     17%     15%     34%
Kern     17%     18%     33%
Kings     28%     36%     54%
Lake     27%     36%     49%
Los Angeles     13%     14%     27%
Madera     14%     30%     46%
Marin     6%     7%     19%
Mendocino     14%     24%     27%
Merced     17%     16%     39%
Monterey     10%     14%     39%
Napa     13%     15%     22%
Orange     7%     8%     17%
Placer     11%     16%     35%
Plumas     40%     27%     NA
Riverside     14%     18%     37%
Sacramento     17%     19%     37%
San Benito     9%     5%     49%
San Bernardino     21%     22%     37%
San Diego     4%     5%     9%
San Joaquin     20%     22%     42%
San Luis Obispo     7%     9%     29%
San Mateo     4%     6%     13%
Santa Clara     5%     7%     14%
Santa Cruz     9%     13%     27%
Siskiyou     28%     44%     43%
Solano     19%     25%     49%
Sonoma     9%     12%     27%
Stanislaus     15%     21%     39%
Sutter     23%     25%     NA
Tulare     21%     18%     38%
Yolo     14%     18%     42%
Yuba     24%     23%     NA
California     12%     15%     28%

NA = not available

*Note: C.A.R.’s pending sales information is generated from a survey of more than 70 associations of REALTORS® and MLSs throughout the state. Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market. A sale is listed as pending after a seller has accepted a sales contract on a property. The majority of pending home sales usually becomes closed sales transactions one to two months later. The year 2008 was used as the benchmark for the Pending Homes Sales Index. An index of 100 is equal to the average level of contract activity during 2008.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 165,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Contact:
CALIFORNIA ASSOCIATION OF REALTORS
Lotus Lou, 213-739-8304
lotusl@car.org

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