Tight Inventory Hinders California Home Sales

Tight Housing Inventory Hinders California Pending Home Sales in September; Share of Equity Sales Reach Highest Level in Four Years, C.A.R. Reports

LOS ANGELES--(BUSINESS WIRE)--
A continued lack of housing inventory constrained California pending home sales in September, while the share of equity sales reached its highest level in four years, CALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R.) reported today.
Pending home sales data:
C.A.R.’s Pending Home Sales Index (PHSI)* fell 3 percent from a revised 119 in August to 115.4 in September, based on signed contracts. Pending sales were up 0.8 percent from the 114.5 index recorded in September 2011.

Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market. 

“It’s typical to see a drop in pending sales from August to September as the housing market transitions from the peak season to the slow season, so the month-to-month decline in the index is not unusual,” said C.A.R. President LeFrancis Arnold. “While it’s encouraging to see an improvement in equity and short sales from last year, a supply shortage continues to put a cap on sales, as housing inventory remains significantly below the 6- to 7-month supply we see in a balanced market. The REO market, in particular, was most affected by the lack of housing supply as both sales and inventory dropped nearly 60 percent from a year ago.”
Distressed housing market data:

• The share of equity sales – or non-distressed property sales – compared with total sales grew to its highest level in four years. The share of equity sales in September increased to 63 percent, up from 62.2 percent in August. Equity sales made up about half (50.8 percent) of all sales in September 2011.
• The share of REO sales statewide shrank further in September, while the share of short sales grew. The combined share of all distressed property sales slipped to 37 percent in September, down from 37.8 percent in August and down from 49.2 percent in September 2011.
• Of the distressed properties, the share of short sales grew to 24.3 percent in September from 23 percent in August and from 21.5 percent a year ago.
• In September, the share of REO sales contracted to less than half what it was a year ago to 12.3 percent, down from 14.4 percent in August and 27.5 percent in September 2011.
• The available supply of REOs eased up in September but remains tight. The Unsold Inventory Index for REOs stood at 2.2 months in September. The Unsold Inventory Index for short sales was 3.9 months and was 3.8 months for equity sales.

Charts:

• Closed housing sales in September by sales type (equity, distressed).
• Pending sales compared with closed sales.
• Historical trend in the share of equity sales compared with distressed sales.
• Housing supply of REOs, short sales, and equity sales in September.
• 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 (Single-family)
Type of Sale					Sept. 2011						Aug. 2012						Sept. 2012
Equity Sales					50.8	%					62.2	%					63.0	%
Total Distressed Sales					49.2	%					37.8	%					37.0	%
REOs					27.5	%					14.4	%					12.3	%
Short Sales					21.5	%					23.0	%					24.3	%
Other Distressed Sales (Not Specified)					0.2	%					0.4	%					0.4	%
All Sales					100.0	%					100.0	%					100.0	%

Single-family Distressed Home Sales by Select Counties (Percent of total sales)
County					Sept. 2011					Aug. 2012					Sept. 2012
Alameda					NA					23%					28%
Amador					54%					40%					38%
Butte					42%					28%					36%
Contra Costa					NA					22%					29%
El Dorado					57%					43%					38%
Fresno					57%					47%					51%
Humboldt					19%					26%					28%
Kern					61%					47%					45%
Kings					NA					52%					39%
Lake					61%					65%					47%
Los Angeles					46%					36%					37%
Madera					65%					49%					60%
Marin					35%					25%					24%
Mendocino					41%					43%					47%
Merced					61%					59%					46%
Monterey					59%					44%					40%
Napa					51%					36%					37%
Orange					36%					27%					25%
Placer					55%					43%					43%
Riverside					60%					52%					50%
Sacramento					63%					52%					50%
San Benito					73%					60%					55%
San Bernardino					65%					49%					45%
San Diego					25%					17%					15%
San Joaquin					64%					56%					52%
San Luis Obispo					40%					30%					28%
San Mateo					26%					15%					20%
Santa Clara					35%					21%					22%
Santa Cruz					40%					28%					31%
Siskiyou					54%					31%					40%
Solano					73%					60%					59%
Sonoma					49%					32%					37%
Stanislaus					66%					57%					57%
Tehama					62%					62%					49%
Yolo					48%					36%					51%
California					49%					38%					37%

**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. CALIFORNIA ASSOCIATION OF REALTORS® Lotus Lou, 213-739-8304 lotusl@car.org

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