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May distressed property sales to 3% of total in SD

San Diego’s share of distressed property resales declined to 3 percent of total sales in May, down from 4 percent in April and 7 percent a year ago, according to the California Association of Realtors (CAR).

Twenty-six of the 41 reported counties showed a month-to-month decrease in the share of distressed resales, with 11 of the counties recording in the single-digits, including Alameda, Marin, San Diego, San Luis Obispo, San Mateo and Santa Clara — all of which registered a share of 5 percent or less.

Statewide, the combined share of all distressed property resales continued to decline in May, primarily due to a drop in lender-owned (REO) sales.

The share of distressed property resales was down from 11.6 percent in April to 10.8 percent in May.

Distressed resales continued to be down by more than 50 percent from a year ago, when the share was 22 percent.

California’s share of equity resales -- or non-distressed property sales -- rose further in May, rising to 89.2 percent, up from 88.4 percent in April.

Equity resales have been rising steadily again since the beginning of this year.

May marks the 11th straight month that equity sales have been more than 80 percent of total resales. Equity resales made up 78 percent of sales in May 2013.

Of the distressed properties, the share of short sales dropped to levels last observed in late 2007 at 5.6 percent, down from 5.9 percent in April. May’s figure was nearly a third of the 14 percent recorded in May 2013.

The share of REO resales fell in May to 4.7 percent, down from 5.3 percent in April and from 7.6 percent in May 2013.

The supply of inventory increased for equity and REO resales in May.

The Unsold Inventory Index for equity resales edged up from 3.6 months in April to 3.7 months in May, and from 2.3 months in April to 2.4 months in May for REO sales.

The supply of short sales dipped from 4.4 months in May to 4.3 months in April.

California pending home sales fell in May, with the Pending Home Sales Index (PHSI) dropping 3.4 percent from a revised 114.1 in April to 110.1 in May, based on signed contracts.

Pending sales were down 10.6 percent from the revised 123.2 index recorded in May 2013.

The year-over-year decline in the PHSI was the first double-digit decline in three months.

Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

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