California Short Sales Rise to Highest Levels in Three Years

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According to the California Association of Realtors (C.A.R.), pending home sales in California climbed in January from both the previous month and the previous year.

Additionally, distressed home sales rose in January, comprising about half of all homes sold.

C.A.R.'s Pending Home Sales Index (PHSI) rose from a revised 91.0 in December to 102.4 in January, based on signed contracts.  The index also was up from the 93.1 recorded in January 2011, marking the ninth consecutive month that pending sales were higher than the previous year.  Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

Key distressed California housing market data:

• Equity sales made up 49.9 percent of home sales in January, down from 52.7 percent in December but up from 46.5 percent in January 2011.

• The total share of all distressed property types sold statewide increased to 50.1 percent in January, up from December's 47.3 percent but down from 53.5 percent in January 2011.

• The share of short sales rose to its highest level in three years since C.A.R. began tracking this statistic.  Of the distressed properties sold statewide in January, 23.8 percent were short sales, up from the previous month's share of 22.2 percent and up from last January's share of 22.2 percent.

• The share of REO sales rose in January to 25.9 percent, up from December's 24.6 percent, but down from the 30.8 percent recorded in January 2011.