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"Perfect Storm" Kept California Buyers Home in December

by devteam January 24th, 2014 | Share

Pending home sales in Californiarnplummeted in December, falling 25.2 percent because of what the CaliforniarnAssociation of Realtors® (C.A.R.) called “a perfect storm” ofrncircumstances.  The Realtor group said arnshortage of homes for sale, rising interest rates and higher home pricesrnsidelined many prospective buyers and drove pending sales down for the secondrnstraight month.</p

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The Pending Home Sales Index (PHSI)rndropped to 68.8 in December from a revised 92 in November.  The index, based on signed contracts tornpurchase, was down 16.8 percent from the December 2012 level of 82.8.</p

The share of equity or non-distressedrnproperty sales shrank slightly from November’s number but still remained strong,rndipping from a recent high of 86.4 percent to 84.3 percent, the sixth monthrnthat at least four of five sales were non-distressed.  In December 2012 the equity share was 63.4rnpercent.   </p

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C.A.R. said that distressed propertyrnsales rose in December (from 13.6 percent to 15.7 percent) because lenders tendrnto push sales through to clear their books at year’s end.  Short sales made up 10.1 percent of sales andrnREO sales accounted for 5.0 percent.  InrnNovember the shares were 8.8 percent and 4.4 percent respectively while a yearrnearlier short sales represented 24.8 percent of all sales and REO 11.4 percent.</p

Inventories in the state remain “extremelyrnconstrained” C.A.R. says.  Its UnsoldrnInventory Index for equity sales fell from 3.6 months in November to 3 monthsrnin December.  Also down were measures ofrndistressed property availability with the supply of REOs estimated at 2.8rnmonths and short sales at 3.2 months compared to 3.6 months and 4.2 months inrnNovember.</p

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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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