LOS ANGELES (Oct. 22) – The share of equity home sales in California continued to grow in September, now making up more than eight of every 10 home sales, the highest level in nearly six years. Meanwhile, the share of short sales fell into the single digits and dropped to levels not seen since January 2009, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.
Distressed housing market data:
• The share of equity sales – or non-distressed property sales – rose again for the 10th straight month, making up more than eight in 10 sales, the highest share since November 2007. The share of equity sales in September increased to 85.8 percent, up from 84.7 percent in August. Equity sales made up 62.7 percent of sales in September 2012.
• Conversely, the combined share of all distressed property sales continued to decline in September, dropping to 14.2 percent in September, down from 15.3 percent in August and down sharply from 37.3 percent in September 2012. Twenty-six of the 38 reported counties showed a month-to-month decrease in the share of distressed sales, with San Diego, San Mateo, and Santa Clara tied for the lowest share at 4 percent.
• Of the distressed properties, the share of short sales, at 9.4 percent, fell to the lowest point since January 2009. September’s figure was down from 10.2 percent in August and was nearly a third of what it was a year ago, when short sales made up 24.3 percent of all sales. The continuing decline in short sales indicates more previously underwater homes are moving into positive equity as home prices are bolstered.
• The share of REO sales also continued to fall, dropping to single-digits for the sixth straight month. REOs made up only 4.3 percent of all sales in September, down from 4.7 percent in August and from 12.5 percent in September 2012. The September 2013 figure was the lowest since August 2007.
• Housing inventory levels improved for the fifth straight month but remained low. The Unsold Inventory Index for equity sales inched up from 3.1 months in August to 3.5 months in September. The supply of REOs edged up from 2.3 months in August to 2.7 months in September, and the supply of short sales rose from 2.3 months in August to 3.8 months in September.
Pending home sales data:
• California pending home sales dipped in September, with the Pending Home Sales Index (PHSI)* slipping 1.8 percent in September to 106.4, down from 108.3 in August, based on signed contracts. The monthly slip was slightly smaller than the average August-to-September decrease over the past five years. Pending sales were down 8.1 percent from the 115.7 index recorded in September 2012. Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.