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California Pending Sales Surge; Short Sales Lowest since 2008

by devteam April 24th, 2014 | Share

California appears to be gearing up forrna strong spring market according to pending home sales figures released todayrnby the California Association of Realtors® (C.A.R.).  The group reports that, based on contractsrnfor home purchases, pending sales jumped 17.8 percent in March and were at thernhighest level in eight months.  C.A.R’srnPending Home Sales Index (PHSI) rose from 97.1 in February to 114.4 in March.  Despite the sharp monthly increase, the PHSIrnwas still well below the revised index of 126.9 for March 2013.   </p

The PHSI is a forward-looking indicatorrnthat provides information on the future direction of home sales.  Pending sales are generally expected to closernwithin 60 to 90 days.</p

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The share of equity sales continued tornrise steadily in March as it has for the last year.  Equity or non-distressed sales representedrn87.6 percent of home sales during the month compared to 85 percent in Februaryrnand it marked the ninth straight month that equity sales made up more than 80rnpercent of the market.  In March 2013rnequity sales had a 71.8 percent market share. </p

Both short sales and sales ofrnlender-owned real estate (REO) were down in March, falling to a combined totalrnof 12.4 percent from 15 percent the previous month.  One year earlier distressed sales made uprn28.2 percent of the market. </p

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Short sales in March were at levels lastrnseen in 2008, accounting for 6.6 percent of sales compared to 8.2 percent inrnFebruary and 17.2 percent in March 2013. rnREO sales had a 5.4 percent share, down from 6.3 percent in February andrnabout half what they were a year earlier. rnThe decrease in distressed sales was observed statewide; 30 of 38rncounties reporting to C.A.R reported a month-over-month decline in the category.  </p

The inventory of available properties,rnespecially non-distressed properties, declined, tightening housing supplyrnconditions.  C.A.R.’s Unsold InventoryrnIndex for equity sales dropped from 4.8 months in February to 4 months inrnMarch; the supply of REO went from 3 months to 2.8 months and short sales fromrn5 months to 4.7 months.

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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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