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California Home Sale Contracts Fall but Equity Share Increases

by devteam October 23rd, 2013 | Share

Pending homes sales in California dippedrnby 1.8 percent on the California Association of Realtors® (C.A.R)rnPending Home Sales Index, falling to 106.4 in September from 108.3 a monthrnearlier.  The Index is a leadingrnindicator which tracks homes for which a purchase contract is signed.  Those contracts are expected to result in arnhome sale in about 60 days. </p

C.A.R. said pending sales usuallyrnslip between August and September and this year that change was slightlyrnsmaller than the average downturn over the past five years.  Pending salesrnwere down 8.1 percent from the 115.7 index recorded in September 2012. </p

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The influence of distressed homernsales on the California real estate market continued to fall in September.  Sales of properties in which the owner had positivernequity increased slightly to 85.8 percent, the highest share since Novemberrn2007, from 84.7 percent in August and 62.7 percent in September 2012. </p

Aggregate distressed sales – sales ofrnowned real estate or REO and short sales in which the mortgage lender agrees tornaccept less than the full mortgage payoff – fell to a 14.2 percent share inrnSeptember from 15.3 percent in August and 37.3 percent in September 2012.  Twenty-six of the 38 counties reporting inrnCalifornia had a month-over-month decrease in the share of distressed homes.</p

Short sales were at their lowestrnpoint since January 2009, a 9.4 percent share. rnThis was 10.2 percent lower than in August.  In September 2012 short sales had a 24.3rnpercent market share.  C.A.R. says therncontinuing decline of short sales shows the more homes are emerging fromrnnegative equity as home prices increase.</p

The share of REO sales was in singlerndigits for the sixth consecutive month. rnPreviously foreclosed homes represented only 4.3 percent of home salesrncompared to 4.7 percent in August and 12.5 percent a year earlier.   </p

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Housing inventory levels improvedrnfor the fifth straight month but remained low.  The Unsold Inventory Indexrnfor equity sales inched up from 3.1 months in August to 3.5 months inrnSeptember.  REOs edged up from 2.3 months supply in August to 2.7 monthsrnin September, and the supply of short sales rose from 2.3 months in August torn3.8 months in September.</p<p<br /<br /

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About the Author

devteam

Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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