Seasonal factors, combined with shrinking housing affordability, cooled California pending home sales from both the previous month and year in November 2013, the California Association of Realtors recently reported.
Pending home sales data
- California pending home sales fell in November, with the Pending Home Sales Index dropping 13.6 percent in November to 93.8, down from a revised 108.6 in October, based on signed contracts. The monthly decline was the first double-digit drop in nearly a year. Pending sales were down 9.4 percent from the 103.5 index recorded in November 2012. Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.
Distressed housing market data
- The share of equity sales — or non-distressed property sales — grew in November, marking the fifth straight month that equity sales have been more than 80 percent of total sales. The share of equity sales in November increased to 86.4 percent, up from 85.4 percent in October. Equity sales made up 64.6 percent of sales in November 2012.
- Conversely, the combined share of all distressed property sales shrank in November, dropping from 14.6 percent in October to 13.6 percent in November. In El Dorado County that percentage dropped from 15 percent in October to 13 percent in November. Distressed sales were down by nearly two-thirds from a year ago, when the share was 35.4 percent; El Dorado County’s share was 38 percent in November 2012. Twenty-one of the 38 reported counties showed a month-to-month decrease in the share of distressed sales, with Santa Clara County having the lowest share at 4 percent.
- Of the distressed properties, the share of short sales was 8.8 percent in November, down from 9.5 percent in October. November’s figure was nearly a third of the 23.3 percent recorded in November 2012 and remains at the lowest levels since January 2009.
- The share of REO sales edged down in November to 4.4 percent from 4.7 percent in October. It was the fourth straight month that REOs made up less than 5 percent of sales. REOs made up only 11.8 percent of all sales in November 2012.
- Housing inventory levels improved slightly for the second consecutive month but were still extremely low. The Unsold Inventory Index for equity sales inched up from 3.4 months in October to 3.6 months in November. The supply of REOs rose from 2.7 months in October to 3.4 months in November, and the supply of short sales increased from 3.6 months in October to 4.2 months in November.
CAR’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.