California pending home sales rose both from the previous month and year in October for the first time in seven months, while the share of equity sales grew slightly, marking a four-year high, according to the California Association of Realtors (CAR).
CAR’s Pending Home Sales Index (PHSI) rose 4.3 percent from a revised 115.2 in September to 120.2 in October, based on signed contracts. Pending sales were up 3.6 percent from the 116.1 index recorded in October 2011. Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.
“The strong pace of pending sales in October is a continuation of what we’ve experienced for most of 2012, with demand remaining robust across all parts of the state,” 2013 CAR President Don Faught said. “Non-distressed sales -- which are up nearly 50 percent from a year ago -- are especially strong, while REO sales are down more than 51 percent, primarily due to a short supply of REOs. The significant increase in non-distressed sales has driven the share of equity sales to its highest level in more than four years.”
In San Diego County, distressed single-family property sales accounted for 15 percent of all sales in September, compared to 14 percent in October and 28 percent in October 2011.
The share of equity sales – or non-distressed property sales – compared with total sales grew slightly in October statewide. The share of equity sales in October increased to 63.4 percent, up from 63 percent in September, the highest level since June 2008. Equity sales made up about half (49 percent) of all sales in October 2011.
The share of REO sales statewide contracted in October, while the share of short sales essentially was unchanged. The combined share of all distressed property sales dipped to 36.6 percent in October, down from 37 percent in September and down from 51 percent in October 2011.
Of the distressed properties, the share of short sales was 24.4 percent in October and 22.6 percent a year ago.
The share of REO sales fell further in October, dropping from 12.3 percent in September to 11.8 percent in October and was down from 28 percent in October 2011.
The available supply of REOs tightened in October, with the Unsold Inventory Index for REOs falling from 2.2 months in September to 1.9 months in October. The Unsold Inventory Index for short sales was 3.1 months and was 3.2 months for equity sales.