LOS ANGELES -- Seasonal factors, combined with low housing inventory -- particularly a lack of lender-owned homes (REOs) -- drove California pending home resales lower in December, the California Association of Realtors (CAR) reported this past week.
However, the share of distressed properties increased in December, as lenders pushed to close short sales and move them off their balance sheets.
CAR's Pending Home Sales Index (PHSI) fell 20.5 percent from a revised 103.5 in November to 82.3 in December, based on signed contracts.
Pending resales were down 6.5 percent from the 88.1 index recorded in December 2011.
Pending home resales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.
For San Diego County, 13 percent of December single-family home resales were of distressed properties, the same as November. A year ago, 28 percent of the county's resales were distressed.
In neighboring Orange County, 30 percent of home resales were distressed in December, compared to 28 percent in November and 42 percent in December 2011.
In Riverside County, 48 percent of home resales were distressed in December, below 51 percent in November and 63 percent in December 2011.
In San Bernardino County, 44 percent of home resales were distressed in December, the same as in November but below 67 percent in December 2011.
The share of equity sales -- or non-distressed property sales -- compared with total sales decreased for the first time in 11 months.
The share of equity sales in December decreased to 63.6 percent, down from 64.9 percent in November. Equity sales were still higher than December 2011's share of 48.4 percent.
* After falling steadily for the past several months, the combined share of all distressed property sales rose to 36.4 percent in December, up from 35.1 percent in November but down from 51.6 percent in December 2011.
Of the distressed properties, the share of short sales was 25 percent in December, up from 23.4 percent in November and from 24 percent a year ago.
* The share of REO sales dipped to 11 percent in December from 11.3 percent in November, and was down from 27.2 percent in December 2011.
The available supply of REOs dipped in December, with the Unsold Inventory Index for REOs declining from 2.1 months in November to 1.9 months in December. The December Unsold Inventory Index was 2.7 months for equity sales and 2.4 months for short sales.