LOS ANGELES — Recent home price gains have lifted more underwater homes into positive territory, pushing the share of equity home sales to their highest level since late 2007. At the same time, pending home sales were essentially unchanged in April, the California Association of Realtors recently reported.
Distressed housing market data
• The share of equity sales — or non-distressed property sales — continued to increase in April, rising to 88.4 percent in April, up from 87.6 percent in March. After a slight decline at the end of 2013, equity sales have been rising steadily again since the beginning of this year. April marks the 10th straight month that equity sales have been more than 80 percent of total sales. Equity sales made up 75.4 percent of sales in April 2013.
• The combined share of all distressed property sales continued to decline in April, thanks to a drop in short sales. The share of distressed property sales was down from 12.4 percent in March to 11.6 percent in April. Distressed sales continued to be down by more than 50 percent from a year ago, when the share was 24.6 percent.
• Twenty-six of the 41 reported counties showed a month-to-month decrease in the share of distressed sales, with 13 of the counties recording in the single-digits, including Alameda, Marin, San Benito, San Diego, San Luis Obispo, San Mateo and Santa Clara counties — all of which registered a share of 5 percent or less.
• Of the distressed properties, the share of short sales dropped to levels last observed in April 2008 at 5.9 percent, down from 6.6 percent in March. April’s figure was nearly a third of the 14.7 percent recorded in April 2013.
• The share of REO sales only dipped slightly in April to 5.3 percent, down from 5.4 percent in March. REO sales are now nearly half of what they were a year ago, when REOs made up 9.4 percent of all sales in April 2013.
• A drop in active listings of equity and REO properties tightened the housing supply in April, causing a decline in unsold inventory across all property types. The Unsold Inventory Index for equity sales dropped from 4 months in March to 3.6 months in April. The supply of REOs slipped from 2.8 months in March to 2.3 months in April, and the supply of short sales declined from 4.7 months in March to 4.4 months in April.
Pending home sales data
• California pending home sales were essentially unchanged from March, with the Pending Home Sales Index dipping 0.5 percent from 114.4 in March to 113.8 in April, based on signed contracts. The month-to-month change was substantially lower than the 6.5 percent drop from March to April observed in the last three years.
• Pending sales were down 6 percent from the revised 121.1 index recorded in April 2013. The year-over-year decline in the PHSI has been tapering over the past few months and should level off in the coming months. Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.