LOS ANGELES--(EON: Enhanced Online News)--Rising mortgage rates dampened pending home sales in August, while distressed home sales fell to levels not seen in nearly six years, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.
“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”
“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.”
Pending home sales data:
- California pending home sales dropped in August, with the Pending Home Sales Index (PHSI)* falling 5 percent in August to 108.3, down from 114 in July, based on signed contracts. Pending sales were down 8.9 percent from the 118.9 index recorded in August 2012. Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.
Distressed housing market data:
- The share of equity sales – or non-distressed property sales – has risen on a month-to-month basis for 18 of the last 19 months and now makes up more than four in five sales, the highest share since November 2007. The share of equity sales in August increased to 84.7 percent, up from 82.9 percent in July. Equity sales made up 62 percent of sales in August 2012.
- The combined share of all distressed property sales continued to decline in August, dropping to 15.3 percent in August, down from 17.1 percent in July and down significantly from 38 percent in August 2012. Twenty-five of the 38 reported counties showed a month-to-month decrease in the share of distressed sales, with Alameda, Contra Costa, Marin, Orange, San Diego, San Mateo, and Santa Clara all recording shares in the single digits.
- Of the distressed properties, the share of short sales, at 10.2 percent, fell to the lowest point since February 2009. August’s figure was down from 11.6 percent in July and was less than half of what it was a year ago, when short sales made up 22.9 percent of all sales. The continuing decline in short sales indicates more previously underwater homes are moving into positive equity as home prices are bolstered.
- The share of REO sales also continued to fall, dropping to single-digits for the fifth straight month. REOs made up only 4.7 percent of all sales in August, down from 5 percent in July and from 14.7 percent in August 2012. The August 2013 figure was the lowest since August 2007.
- 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.
- Pending sales compared with closed sales.
- Historical trend in the share of equity sales compared with distressed sales.
- Closed housing sales in August by sales type (equity, distressed).
- Housing supply of REOs, short sales, and equity sales in August.
- A historical trend of REO, short sale, and equity sales housing supply.
- Year-to-year change in sales by property type.
Share of Distressed Sales to Total Sales
|Type of Sale||Aug. 2013||July 2013||Aug. 2012|
|Total Distressed Sales||15.3||%||17.1||%||38.0||%|
|Other Distressed Sales (Not Specified)||0.4||%||0.4||%||0.4||%|
Single-family Distressed Home Sales by Select Counties
(Percent of total sales)
|County||Aug. 2013||July 2013||Aug. 2012|
|San Luis Obispo||11||%||9||%||30||%|
NA = not available
*Note: C.A.R.’s pending sales information is generated from a survey of more than 70 associations of REALTORS® and MLSs throughout the state. Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market. A sale is listed as pending after a seller has accepted a sales contract on a property. The majority of pending home sales usually becomes closed sales transactions one to two months later. The year 2008 was used as the benchmark for the Pending Homes Sales Index. An index of 100 is equal to the average level of contract activity during 2008.
Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 155,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.