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California pending home sales highest in eight months

April 23, 2014

(CNS) – California pending home sales increased more than usual in March and rose to the highest level in eight months, the California Association of Realtors reported today, calling the development “an encouraging sign for a healthier spring home-buying market.”

At the same time, the share of short sales — generally sales that occur when lenders agree to accept less than what is owed — has fallen to levels last seen in 2008, a CAR statement reported.

California pending home sales climbed 17.8 percent in March, with the Pending Home Sales Index rising from 97.1 in February to 114.4 in March, based on signed contracts.

The March index was the highest since July 2013, according to the statement.

Pending sales were down 9.9 percent from the revised 126.9 index recorded in March 2013, CAR said, adding that the year-over-year decline in the index 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.

CAR also reported today that 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, it said.

Equity sales stabilized over the past several months but have started rising again as the spring home-buying season takes off, according to CAR.

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, according to CAR. Distressed sales continued to be down by more than a half from a year ago, when the share was 28.2 percent.

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, CAR said. March’s figure was nearly a third of the 17.2 percent recorded in March 2013.