Tight housing inventory, slower economy constrain California pending home sales in June
LOS ANGELES (July 24) – A continued lack of housing inventory and slowing economy sent California pending home sales lower in June, but pending sales were still higher than the previous year for the fourteenth straight month, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.
Pending home sales data:
C.A.R.’s Pending Home Sales Index (PHSI)* fell 3.8 percent from a revised 126.1 in May to 121.4 in June, based on signed contracts. Pending sales were up 4.7 percent from the 115.9 index recorded in June 2011. June marked the fourteenth consecutive month that pending sales were higher than the previous year, although June’s year-over-year increase was the smallest since April 2011. Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.
“Pending sales declined in June, partly due to a lack of housing supply – especially in REO properties,” said C.A.R. President LeFrancis Arnold. “The shortage of REO inventory is also putting upward pressure on bank-owned home prices, with the median price of REO properties showing a double-digit year-over-year gain of 11 percent in June.”
Distressed housing market data:
• The share of equity sales – or non-distressed property sales – compared with total sales grew further in June. The share of equity sales rose to 58 percent in June, up from a revised 56 percent in May. Equity sales made up 50.5 percent of all sales in June 2011.
• The share of REO sales statewide was significantly lower from a year ago, while the share of short sales was up slightly. The combined share of all distressed property sales fell to 42 percent in June, down from May’s 44 percent and from 49.5 percent in June 2011.
• The share of short sales edged up in June to 21.4 percent, up from 21.1 percent in May and from 20 percent a year ago.
• Of the distressed properties, the share of REO sales continued to decline in June to 20.2 percent, down from 22.6 percent in May and 29.2 percent in June 2011.
• The available supply of REOs for sale tightened slightly in June, with the Unsold Inventory Index declining from a 1.5-month supply in May 2012 to 1.4 months in June 2012. The June Unsold Inventory Index for equity sales stood at 3.7 months and was 5.3 months for short sales.
Multimedia and charts:
• View a video of C.A.R. Chief Economist Leslie Appleton-Young discussing highlights of the June existing home sales and price report, which was released July 17.
• View a chart of closed housing sales in June by sales type (equity, distressed).
• View a chart of pending sales compared with closed sales.
• View a chart of the historical trend in the share of equity sales compared with distressed sales.
• View a chart of housing supply for REOs, short sales, and equity sales in June.
Share of Distressed Sales to Total Sales
|Type of Sale||June 2011||
|Total Distressed Sales||49.5%||44.0%||42.0%|
|Other Distressed Sales (Not Specified)||0.2%||0.3%||0.4%|
Single-family Distressed Home Sales by Select Counties
(Percent of total sales)
|San Luis Obispo||42%||35%||34%|
**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.