California pending home sales decline month over month but up from last year

Pending home sales in California decline

The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported this week that contracts signed for previously owned homes in California took a dip in June. The decline in pending sales can be attributed to a lack of housing inventory.

• C.A.R.’s Pending Home Sales Index declined 3.8 percent in June compared with May but posted a 4.7 percent increase compared with a year earlier.
• Pending home sales are an early indicator of where sales are headed. Sales often close six to eight weeks after contracts are signed so a decline in June could mean weakness when July and August sales statistics are reported.
• C.A.R.’s report also showed a decline in the number of foreclosed homes selling. Last month, foreclosed homes accounted for 20.2 percent of all pending sales, a decline of 22.6 percent from May and 29.2 percent in June 2011.
• The share of equity sales – or non-distressed property 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 short sales edged up in June to 21.4 percent, up from 21.1 percent in May and from 20 percent a year ago.
• 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.