California Pending Home Sales Uptick 14% in February

Residential News » North America Residential News Edition | By Michael Gerrity | March 25, 2014 1:19 PM ET

According to the California Association of Realtors (C.A.R.), pending home sales posted stronger than average gains in February for the second straight month, thanks to seasonal factors.

Yet despite slight improvements in statewide housing demand, the market remained below last year's pace.

Key California pending home sales data for February 2014 include:

California pending home sales jumped 14.2 percent in February, with the Pending Home Sales Index (PHSI) rising from 84.8 in January to 96.8 in February, based on signed contracts.

Pending sales were down 12 percent from the 110.1 index recorded in February 2013. The year-over-year decline was the sixth straight annual double-digit drop in the PHSI, but should start to taper in the upcoming months.

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:

Share of equity sales - or non-distressed property sales - increased to 85 percent in February, up from 84.4 percent in January. Equity sales have stabilized over the past several months and should continue to hover around 85 percent, with February marking the eighth straight month that equity sales have been more than 80 percent of total sales. Equity sales made up 66.7 percent of sales in February 2013.

Combined share of all distressed property sales was down in February. The share of distressed property sales dipped from 15.6 percent in January to 15 percent in February. Distressed sales continued to be down by more than a half from a year ago, when the share was 33.3 percent. More than half of the 38 reported counties showed a month-to-month decrease in the share of distressed sales, with San Diego and San Francisco Bay Area counties registering the smallest share.

Out of distressed properties, the share of short sales was 8.2 percent in February, down from 9.2 percent in January. February's figure was more than half of the 19.6 percent recorded in February 2013 and remained at the lowest levels since January 2009.

Share of REO sales increased in February to 6.3 percent, up from 5.9 percent in January. REOs made up 13.2 percent of all sales in February 2013.

February saw a slight 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 crept up from 4.4 months in January to 4.8 months in February. The supply of REOs dipped from 3.2 months in January to 3 months in February, and the supply of short sales increased from 4.6 months in January to 5 months in February.