Recent home price gains have lifted more underwater California homes into positive territory; share of non-distressed property sales rose to 88.4% in April, up from 87.6% in March, 75.4% a year ago: CAR

LOS ANGELES , May 23, 2014 (press release) – Share of equity home sales rises to highest level in more than six years as higher home prices buoy more underwater homes

Recent home price gains have lifted more underwater homes into positive territory, pushing the share of equity home sales to their highest level since late 2007.  At the same time, pending home sales were essentially unchanged in April, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. 

Distressed housing market data:

• The share of equity sales – or non-distressed property sales – continued to increase in April, rising to 88.4 percent in April, up from 87.6 percent in March.  After a slight decline at the end of 2013, equity sales have been rising steadily again since the beginning of this year.  April marks the 10th straight month that equity sales have been more than 80 percent of total sales. Equity sales made up 75.4 percent of sales in April 2013.

• The combined share of all distressed property sales continued to decline in April, thanks to a drop in short sales.  The share of distressed property sales was down from 12.4 percent in March to 11.6 percent in April.  Distressed sales continued to be down by more than 50 percent from a year ago, when the share was 24.6 percent.

• Twenty-six of the 41 reported counties showed a month-to-month decrease in the share of distressed sales, with 13 of the counties recording in the single-digits, including Alameda, Marin, San Benito, San Diego, San Luis Obispo, San Mateo, and Santa Clara counties — all of which registered a share of five percent or less.

• Of the distressed properties, the share of short sales dropped to levels last observed in April 2008 at 5.9 percent, down from 6.6 percent in March.  April’s figure was nearly a third of the 14.7 percent recorded in April 2013.

• The share of REO sales only dipped slightly in April to 5.3 percent, down from 5.4 percent in March.  REO sales are now nearly half of what they were a year ago, when REOs made up 9.4 percent of all sales in April 2013. 

• A drop in active listings of equity and REO properties tightened the housing supply in April, causing a decline in unsold inventory across all property types.  The Unsold Inventory Index for equity sales dropped from 4 months in March to 3.6 months in April.  The supply of REOs slipped from 2.8 months in March to 2.3 months in April, and the supply of short sales declined from 4.7 months in March to 4.4 months in April.

Pending home sales data:

• California pending home sales were essentially unchanged from March, with the Pending Home Sales Index (PHSI)* dipping 0.5 percent from 114.4 in March to 113.8 in April, based on signed contracts.  The month-to-month change was substantially lower than the 6.5 percent drop from March to April observed in the last three years.

• Pending sales were down 6 percent from the revised 121.1 index recorded in April 2013.  The year-over-year decline in the PHSI has been tapering over the past few months and should level off in the coming months.  Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

Charts (click link to open):

• Pending sales compared with closed sales.
• Historical trend in the share of equity sales compared with distressed sales.
• Closed housing sales in April by sales type (equity, distressed).
• Housing supply of REOs, short sales, and equity sales in April.
• A historical trend of REO, short sale, and equity sales housing supply.
• Year-to-year change in sales by property type.

Share of Distressed Sales to Total Sales

Type of Sale Apr-14 Mar-14 Apr-13
Equity Sales 88.4% 87.6% 75.4%
Total Distressed Sales 11.6% 12.4% 24.6%
     REOs 5.3% 5.4% 9.4%
     Short Sales 5.9% 6.6% 14.7%
     Other Distressed Sales (Not Specified)  0.5% 0.5% 0.5%
All Sales  100.0% 100.0% 100.0%

Single-family Distressed Home Sales by Select Counties
(Percent of total sales)

County Apr-14 Mar-14 Apr-13
Alameda 4% 6% 9%
Amador 22% 30% 40%
Butte 18% 19% 27%
Calaveras 18% 18% 36%
Contra Costa 6% 9% 11%
El Dorado 15% 15% 22%
Fresno 19% 22% 38%
Glenn 23% 38% 27%
Humboldt 13% 17% 20%
Kern 19% 17% 31%
Kings 23% 28% 40%
Lake 26% 27% 49%
Los Angeles 12% 13% 24%
Madera 17% 14% 47%
Marin 5% 6% 10%
Mendocino 27% 14% 24%
Merced 12% 17% 44%
Monterey 13% 10% 37%
Napa 6% 13% 23%
Orange 7% 7% 13%
Placer 9% 11% 23%
Plumas 35% 40% NA
Riverside 15% 14% 32%
Sacramento 16% 17% 32%
San Benito 4% 9% 22%
San Bernardino 18% 21% 35%
San Diego 4% 4% 10%
San Joaquin 19% 20% 43%
San Luis Obispo 4% 7% 17%
San Mateo 2% 4% 11%
Santa Clara 4% 5% 10%
Santa Cruz 9% 9% 18%
Shasta 20% 20% 37%
Siskiyou 24% 28% 34%
Solano 14% 19% 43%
Sonoma 9% 9% 22%
Stanislaus 15% 15% 37%
Sutter 17% 23% NA
Tulare 24% 21% 34%
Yolo 12% 14% 34%
Yuba 28% 24% NA
California 12% 12% 25%

NA = not available

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*Note:  C.A.R.’s pending sales information is generated from a survey of more than 70 associations of REALTORS® and MLSs throughout the state.  Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market.  A sale is listed as pending after a seller has accepted a sales contract on a property.  The majority of pending home sales usually becomes closed sales transactions one to two months later.  The year 2008 was used as the benchmark for the Pending Homes Sales Index.  An index of 100 is equal to the average level of contract activity during 2008.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® ( is one of the largest state trade organizations in the United States with 165,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

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