closed sales which were reported last week, pending real estate sales in
California dropped in August while distressed home sales were down to levels last
seen six years ago the California Association of Realtors® (C.A.R.) said today. C.A.R. said rising mortgage rates were
responsible for the drop in the Pending Home Sales Index (PHSI) which fell 5
percent in August.
Index was at 114 in July. In August it
fell to 108.3 which was also 8.9 percent below the index recorded in August
2012. Pending sales are a forward
looking indicator of future home sales activity based on signed home purchase
contracts. Last week C.A.R. said closed sales in August
had fallen to a seasonally adjusted annual rate of 434,700 units, a 2 percent
decrease from July.
"Rising interest rates over the past
several months at the specter of a tapering of the Fed's stimulus program sent
buyers to the sidelines in August," said C.A.R. Vice President and Chief
Economist Leslie Appleton-Young. "However, the Fed's decision last week
to postpone the pullback should lead to
lower interest rates, which bodes well for prospective buyers."
Non-distressed or equity property
sales have risen on a month-to-month basis for 18 of the last 19 months C.A.R.
said and now account for more than four in five sales, the highest share since
November 2007. Equity sales rose from
82.9 percent of all residential sales in July to 84.7 percent in August. One year earlier equity sales made up 62
percent of the total.
Twenty-five of the 38 counties
reporting to C.A.R. reported distressed sales down in August and some of the
largest counties - San Diego, San Mateo, Alameda, Orange, and others - reported
distressed sales in the single digits.
Short sales fell to 10.2 percent of
all sales, the lowest point since February 2009 and were less than half what they
were in August 2012. C.A.R. said the
continuing decline in short sales indicates more previously underwater homes
are now selling at a high enough price to cover the mortgage.
The share of REO sales also
continued to fall and was in single-digits for the fifth straight month. Bank owned property accounted for 4.7 percent
of sales in August compared to 5 percent in July and 14.7 percent in August
Housing inventory levels improved
further in August but remained in short supply. The Unsold Inventory
Index for equity sales inched up from 3 months in July to 3.1 months in August.
The supply of REOs edged up from 2.1 months in July to 2.3 months in
August, and the supply of short sales rose from 2.5 months in July to 2.9
months in August.