Back-to-back increase in October pending home sales point to year ending on a high note
November 25, 2014 - LOS ANGELES – Pending home sales in California picked up steam in October and rose for the second straight month, portending a pickup in closed sales for the remainder of the year, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
Pending home sales data:
• California pending home sales were up in October, with the Pending Home Sales Index (PHSI)* rising 2 percent from a revised 102.6 in September to 104.6 in October, based on signed contracts. October’s increase was the first back-to-back increase since early this year, when pending sales rose for three straight months, starting in January.
• Pending sales dipped 0.5 percent from the revised 105.2 index recorded in October 2013. The yearly decrease was significantly lower than the six-month average of -6.7 percent from April 2014 to September 2014.
Equity and distressed housing market data:
• The share of equity sales – or non-distressed property sales – edged up in October. Equity sales made up 91.1 percent of all sales in October, up from 90.9 percent recorded in September. Equity sales have been more than 80 percent of total sales since July 2013 and have risen to or above 90 percent for five straight months. Equity sales made up 85.5 percent of sales in October 2013.
• Conversely, the combined share of all distressed property sales dipped in October, down from 9.1 percent in September to 8.9 percent in October. Distressed sales were down nearly 40 percent from a year ago, when the share was 14.5 percent.
• Half of the 41 reporting counties experienced a month-to-month decrease in the share of distressed sales, with 17 of the counties recording in the single-digits, including Alameda, Contra Costa, Marin, Napa, Orange, San Diego, San Mateo, Santa Clara, and Santa Cruz, Sonoma, and Yolo counties — all of which registered a share of five percent or less.
• Of the distressed properties, the share of short sales remained at its lowest level since February 2008, holding steady at 4.6 percent in October, unchanged from September. October’s figure was less than half the 9.3 percent recorded in October 2013.
• The share of REO sales dipped in October to 3.9 percent from 4 percent in September and from 4.7 percent in October 2013.
• The supply of REO properties eased slightly in October, while the supply of equity and short sales tightened. The Unsold Inventory Index of REO sales ticked up from 3.1 months in September to 3.2 months in October. The supply of equity sales fell from 4.1 months in September to 3.8 months in October, and the supply of short sales dropped to 5.7 months in October from 6.2 months in September.
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 October by sales type (equity, distressed).
• Housing supply of REOs, short sales, and equity sales in October.
• 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||Oct-14||Sep-14||Oct-13|
|Total Distressed Sales||8.9%||9.1%||14.5%|
|Other Distressed Sales (Not Specified)||0.4%||0.5%||0.5%|
(Percent of total sales)
|San Luis Obispo||6%||7%||12%|
*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.