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.
Making sense of the story
- 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.
Regardless of the statistics looking slightly better, close to 50% of all homes sales are a DISTRESSED sale in nature. Most distressed houses are in need of repair or do not meet the buyers expectations. When you combine that with a low supply of homes, the house shopping process is challenging. More consumers are becoming aware of the 203k rehab program today than before. Consider working with a knowledgeable lender with these programs to help increase business and help get buyers what they want, an ideal home.
