California pending home sales see first annual increase in nearly two years

by 26 Jan 2015
Pending home sales in California reported higher on a year-over-year basis for the first time since January 2013, according to the California Association of Realtors (CAR).

As expected sales declined from the previous month due primarily to a seasonal slowdown toward the end of the year. Additionally, with the specter of a better economy, greater job growth, and increasing household formation, CAR's latest Market Pulse Survey found that many realtors expect market conditions to improve in 2015.

Pending home sales:

• Pending sales were up 2.6%  from the 69.1 index recorded in December 2013.  The yearly increase was better than the six-month average of -4.3%  from June 2014 to November 2014.

• California pending home sales dropped in December, with the Pending Home Sales Index  falling 21.9% from 90.7 in November to 70.9 in December, based on signed contracts. NAR said the monthly decline was in line with the seasonal slowdown in pending sales observed at the end of the year for the last two years.
 
Equity and distressed housing market:

• The share of equity sales – or non-distressed property sales – dipped for the second straight month in December.  Equity sales made up 89.8% of all sales in December, down from 90.5% recorded in November.  Equity sales have been more than 80% of total sales since July 2013 and have risen at or near 90% since mid-2014. Equity sales made up 84.4% of sales in December 2013.

• The combined share of all distressed property sales edged up in December, up from 9.5% in November to 10.2% in December. Distressed sales were down 33% from a year ago, when the share was 15.6%.

Realtor Market Pulse Survey results:

• In the fourth quarter of 2014, 87% of realtors surveyed expected market conditions to either improve or stay the same over the next year.

• About 61% of realtors closed a transaction in the fourth quarter of 2014, compared to the first quarter (53%).

• In an indication of stabilizing home prices, fewer homes (24%) sold above asking price in the fourth quarter of 2014, compared to 46 percent in the first quarter.

• Homes selling below asking price rose from 19%  in the first quarter of 2014 to 48% in the fourth quarter, indicating home sellers’ expectations moved more in line with buyers’ expectations toward the end of the year and competition between sellers attempting to appeal to affordability strapped home buyers increased.

• More than half (58%) of properties received multiple offers in the fourth quarter of 2014, down from 69% in the first quarter.

Share of distressed sales to total sales

Type of Sale Dec-14 Nov-14 Dec-13
Equity Sales 89.8% 90.5% 84.4%
Total Distressed Sales 10.2% 9.5% 15.6%
     REOs 4.7% 4.3% 5.1%
     Short Sales 5.1% 4.8% 10.0%
     Other Distressed Sales (Not Specified)  0.4% 0.4% 0.5%
All Sales  100.0% 100.0% 100.0%


Single-family Distressed Home Sales by Select Counties
(Percent of total sales)

County Dec-14 Nov-14 Dec-13
Alameda 3% 3% 9%
Amador 10% 7% 35%
Butte 18% 13% 18%
Calaveras 14% 19% NA
Contra Costa 6% 3% 7%
El Dorado 14% 7% 19%
Fresno 19% 16% 24%
Glenn 40% 29% 27%
Humboldt 14% 12% 14%
Kern 13% 10% 19%
Kings 26% 17% 28%
Lake 20% 19% 34%
Los Angeles 9% 9% 17%
Madera 13% 14% 20%
Marin 2% 2% 8%
Mariposa 7% 10% 40%
Mendocino 25% 13% 27%
Merced 10% 17% 22%
Monterey 9% 9% 20%
Napa 3% 7% 10%
Orange 6% 5% 10%
Placer 7% 8% 13%
Plumas 8% 11% NA
Riverside 12% 13% 17%
Sacramento 13% 12% 19%
San Benito 8% 3% 15%
San Bernardino 14% 16% 22%
San Diego 6% 6% 5%
San Joaquin 13% 11% 23%
San Luis Obispo 6% 6% 7%
San Mateo 2% 1% 6%
Santa Clara 3% 2% 7%
Santa Cruz 2% 6% 15%
Shasta 20% 19% 24%
Siskiyou 26% 24% 24%
Solano 11% 9% 22%
Sonoma 6% 5% 15%
Stanislaus 12% 10% 22%
Sutter 20% 21% 32%
Tulare 16% 17% 26%
Yolo 10% 8% 18%
Yuba 22% 16% 31%
California 10% 10% 16%

NA = not available

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