Pending Home Sales Reverse Two-Month Decline; Inventory Loosens Heading into Spring Homebuying Season

Business Wire

LOS ANGELES--(BUSINESS WIRE)--

With the statewide housing inventory slowly improving, California pending home sales picked up steam in January and reversed a two-month decline, but pending sales were still down from a year ago, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“We’re starting to see a turning point in the market as we approach the spring homebuying season. Home sellers realize that home prices are holding steady and are gearing up for the upcoming season by listing their homes for sale, while prospective home buyers are getting more comfortable with stabilizing home prices and interest rates and are entering the market,” said C.A.R. President Kevin Brown.

Pending home sales data:

  • California pending home sales posted higher in January, with the Pending Home Sales Index (PHSI)* jumping 22.9 percent in January to reach 84.8, up from a revised index of 68.9 in December, based on signed contracts. Pending sales were down 17.5 percent from the revised 102.8 index recorded in January 2013. The year-over-year decline was the fifth straight annual double-digit drop in the PHSI. 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:

  • After reaching a recent high in November, the share of equity sales – or non-distressed property sales – was essentially unchanged in January, but still marked the seventh straight month that equity sales have been more than 80 percent of total sales. The share of equity sales in January dipped to 84.4 percent, down from 84.5 percent in December. Equity sales made up 64.2 percent of sales in January 2013.
  • Conversely, the combined share of all distressed property sales also was essentially unchanged in January. The share of distressed property sales edged up from 15.5 percent in December to 15.6 percent in January. Still, distressed sales were down by more than a half from a year ago, when the share was 35.8 percent. About half of the 37 reported counties showed a month-to-month decrease in the share of distressed sales, with San Diego County having the smallest share at 4 percent.
  • Of the distressed properties, the share of short sales was 9.2 percent in January, down from 10 percent in December. January’s figure was nearly half of the 21.2 percent recorded in January 2013 and remained at the lowest levels since January 2009.
  • The share of REO sales inched up in January to 5.9 percent from 5 percent in December. REOs made up 14.2 percent of all sales in January 2013.
  • January saw an increase in active listings across all property types, especially in equity properties, which helped to improve housing supply conditions. The Unsold Inventory Index for equity sales climbed from 3 months in December to 4.4 months in January. The supply of REOs rose from 2.8 months in December to 3.2 months in January, and the supply of short sales increased from 3.2 months in December to 4.6 months in January.

Charts (click link to open):

Share of Distressed Sales to Total Sales
(Single-family)
 

Type of Sale

  Jan.   Dec.   Jan.
  2014   2013   2013
Equity Sales   84.4%   84.5%   64.2%
Total Distressed Sales   15.6%   15.5%   35.8%
REOs   5.9%   5.0%   14.2%
Short Sales   9.2%   10.0%   21.2%
Other Distressed Sales (Not Specified)   0.5%   0.5%   0.4%
All Sales   100.0%   100.0%   100.0%
 
Single-family Distressed Home Sales by Select Counties
(Percent of total sales)
 

County

  Jan.   Dec.   Jan.
  2014   2013   2013
Alameda   10%   9%   21%
Amador   21%   35%   48%
Butte   14%   15%   42%
Contra Costa   12%   7%   31%
El Dorado   20%   19%   37%
Fresno   26%   24%   48%
Humboldt   17%   14%   23%
Kern   18%   19%   38%
Kings   45%   28%   38%
Lake   50%   34%   54%
Los Angeles   16%   17%   35%
Madera   15%   15%   42%
Marin   13%   8%   23%
Mendocino   19%   27%   42%
Merced   27%   22%   58%
Monterey   17%   20%   43%
Napa   17%   10%   30%
Orange   9%   10%   27%
Placer   15%   13%   35%
Riverside   16%   17%   45%
Sacramento   20%   19%   44%
San Benito   18%   15%   39%
San Bernardino   22%   22%   42%
San Diego   4%   5%   14%
San Joaquin   25%   23%   53%
San Luis Obispo   10%   7%   30%
San Mateo   7%   6%   19%
Santa Clara   8%   7%   24%
Santa Cruz   12%   15%   38%
Siskiyou   34%   24%   57%
Solano   22%   22%   59%
Sonoma   11%   15%   35%
Stanislaus   25%   22%   52%
Sutter   17%   28%   NA
Tulare   20%   26%   41%
Yolo   13%   18%   39%
Yuba   24%   33%   NA
California   16%   14%   37%
 

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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