From the California Association of Realtors
July pending home sales lose steam; share of equity sales expands further
LOS ANGELES (Aug. 23) – Despite ultra-low interest rates, California’s real estate market continued to underperform in July, with pending home sales posting lower for the fourth straight month. At the same time, equity home sales improved further, as both short sales and REO sales continued to decline, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
Pending home sales data:
• California pending home sales fell in July, with the Pending Home Sales Index (PHSI)* dropping 2.3 percent from 107 in June to 104.5 in July, based on signed contracts. The month-to-month drop was consistent with seasonal trends.
• Pending sales were down 9.2 percent from the 115.1 index recorded in July 2013. Pending sales have been down year to year since October 2012, but the pace appears to be decelerating as the decrease in July was smaller than the average in the last six 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 – continued its upward trend, inching up in July to 90.6 percent, up from 90.3 percent in June. Equity sales have been rising steadily again since the beginning of this year. Equity sales have been more than 80 percent of total sales for more than two years and have risen above 90 percent for the second straight month. Equity sales made up 82.8 percent of sales in July 2013.
• The combined share of all distressed property sales declined further in July, dropping from 9.7 percent in June to 9.4 percent in July. Distressed sales continued to be down more than 50 percent from a year ago, when the share was 17.2 percent.
• Twenty-one of the 41 reporting counties showed a month-to-month decrease in the share of distressed sales, with 20 of the counties recording in the single-digits, including Alameda, Contra Costa, Marin, Orange, Plumas, San Diego, San Luis Obispo, San Mateo, Sonoma, and Santa Clara counties — all of which registered a share of five percent or less.
• Of the distressed properties, the share of short sales fell to its lowest level since February 2008, falling to 4.9 percent in July, down from 5 percent in June. July’s figure was less than half the 11.6 percent recorded in July 2013.
• The share of REO sales fell in July to 4.1 percent, down from 4.4 percent in June and from 5.2 percent in July 2013.
• The supply of equity and REO properties eased in July, with the Unsold Inventory Index of equity sales edging up from 3.8 months in June to 3.9 months in July, and from 2.4 months in June to 2.5 months in July for REO sales. The supply of short sales dipped from 4.8 months in June to 4.7 months in July.
Charts (click links to open):
• Pending sales compared with closed sales.
• Historical trend in the share of equity sales compared with distressed sales.
• Closed housing sales in July by sales type (equity, distressed).
• Housing supply of REOs, short sales, and equity sales in July.
• A historical trend of REO, short sale, and equity sales housing supply.
• Year-to-year change in sales by property type.
Share of Distressed Sales to Total Sales
|Type of Sale||July
|Total Distressed Sales||9.4%||9.7%||17.2%|
|Other Distressed Sales (Not Specified)||0.4%||0.3%||0.4%|
Single-family Distressed Home Sales by Select Counties
(Percent of total sales)
|San Luis Obispo||5%||5%||9%|
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.