With the statewide housing inventory slowly improving, California pending home sales picked up steam in January and reversed a two-month decline, but pending sales were still down from a year ago, the California Association of Realtors reported yesterday.
"We're starting to see a turning point in the market as we approach the spring home-buying season," said CAR President Kevin Brown.
"Home sellers realize that home prices are holding steady and are gearing up for the upcoming season by listing their homes for sale, while prospective home buyers are getting more comfortable with stabilizing home prices and interest rates and are entering the market," he added.
California pending home sales posted higher in January, with the Pending Home Sales Index (PHSI) jumping 22.9% in January to reach 84.8, up from a revised index of 68.9 in December, based on signed contracts. Pending sales were down 17.5% from the revised 102.8 index recorded in January 2013. The year-over-year decline was the fifth straight annual double-digit drop in the PHSI.
Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.
After reaching a recent high in November, the share of equity sales, or non-distressed property sales, was essentially unchanged in January, but still marked the seventh straight month that equity sales have been more than 80% of total sales.
The share of equity sales in January dipped to 84.4%, down from 84.5% in December. Equity sales made up 64.2% of sales in January 2013.
Conversely, the combined share of all distressed property sales also was essentially unchanged in January. The share of distressed property sales edged up from 15.5% in December to 15.6% in January.
Still, distressed sales were down by more than a half from a year ago, when the share was 35.8%. About half of the 37 reported counties showed a month-to-month decrease in the share of distressed sales, with San Diego County having the smallest share at 4%.
Of the distressed properties, the share of short sales was 9.2% in January, down from 10% in December. January's figure was nearly half of the 21.2% recorded in January 2013 and remained at the lowest levels since January 2009.
The share of REO sales inched up in January to 5.9% from 5% in December. REOs made up 14.2% of all sales in January 2013.
January saw an increase in active listings across all property types, especially in equity properties, which helped to improve housing supply conditions. The Unsold Inventory Index for equity sales climbed from 3 months in December to 4.4 months in January.
The supply of REOs rose from 2.8 months in December to 3.2 months in January, and the supply of short sales increased from 3.2 months in December to 4.6 months in January.