California Pending Home Sales Slow in September

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According to the California Association of Realtors (C.A.R.), pending home sales in California fell in September, as is typical for this time of year, but were up from the previous year for the fifth consecutive month.  Additionally, distressed home sales increased slightly in September from both the previous month and year.

Pending home sales:

California pending home sales fell 5.2 percent in September, but were up from a year ago, according to C.A.R.'s Pending Home Sales Index (PHSI).  The index was 118.5 in September, based on contracts signed in that month, down from August's index of 125.0.  The index was up 8.4 percent from September 2010.  September marked the fifth consecutive month that pending sales rose from the previous year.  Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

"While recent pending home sales have increased from last year's levels, housing inventory remains lean across all property types, particularly REOs (real estate-owned), which currently is at a 2.6-month supply," said C.A.R. President Beth L. Peerce.  "However, some major lenders recently announced they would accelerate the release of REOs onto the market, which should help alleviate the current shortage of housing inventory."

Distressed housing market data:

• The total share of all distressed property types sold statewide rose to 44.4 percent in September, up from August's 43.7 percent and 43.6 percent in September 2010.

• Of the distressed properties sold statewide in September, 20.2 percent were short sales, up from the previous month's share of 18.9 percent and last September's share of 19.5 percent.

• At 24 percent, the share of REO sales was down slightly from August's 24.4 percent, but up from the 23.8 percent reported in September 2010.

• Equity sales made up the remaining share of home sales in September at 55.6 percent, down from 56.3 percent in August and 56.4 percent in September 2010.

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