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REALTOR®: Distressed sales rise in December as lenders push through more REOs, short sales

Wednesday, January 25, 2012

The California Association of REALTORS® Pending Home Sales Index dropped between November and December, due to the annual seasonal slowdown. C.A.R. reports sales of distressed properties increased in December, as lenders pushed to close REOs and short sales to move them off their balance sheets before the end of the year. 

C.A.R.'s Pending Home Sales Index (PHSI) fell from 108.7 in November to 91.6 in December, based on signed contracts. The index was up from the revised 82.5 recorded in December 2010. While down due to the normal seasonal drop that usually occurs in November and December, the PHSI was higher than a year ago for the eighth straight month. The trend bodes well for the start of the spring home-buying season, according to C.A.R.

Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market. In Santa Clara County, according to data from MLSListings Inc., the Multiple Listing Service of the Silicon Valley Association of REALTORS®, there were 2,062 single-family homes sales under contract in December, down from 2,286 in November and 2,219 in December 2010. In San Mateo County, there were 689 single-family home sales pending, down from 793 in the previous month and up from 603 in December 2010.

C.A.R. likewise indicated that equity sales made up 52.7 percent of home sales in December, down up from 55.1 percent in November, but up from 51.7 percent in December 2010. The total share of all distressed property types sold statewide rose to 47.3 percent in December, up from November's 44.9 percent, but down from 48.3 percent in December 2010. Of the distressed properties sold statewide in December, 22.2 percent were short sales, up from the previous month's share of 21 percent and up from last December's share of 19.6 percent. The share of REO sales rose in December to 24.6 percent, up from November's 23.5 percent, but down from the 28.3 percent recorded in December 2010.

In Santa Clara County, the total share of distressed property home sales in December rose to 37 percent from 32 percent in November, but dropped slightly from 39 percent in December 2010. The total share of all distressed property types sold in San Mateo County was at 28 percent in December, the same as in November 2011 and December 2010.

As banks work through the distressed properties in the area, Silicon Valley Association of REALTORS® president Suzanne Yost said all indications point to a positive growth in the region this year. "We are fortunate that there are fewer distressed properties in our area compared to other parts of the state. Unemployment, though still high, is down to around 9.8 percent in Silicon Valley and IPOs have rebounded. In fact, the valley has added over 12,000 new jobs in the past year. Consumer confidence is up because there is more stability and less fear," said Yost. "I really believe 2012 will be a year of possibilities."

Yost also praised President Obama for his remarks in support of homeowners and the struggling housing market during Tuesday's State of the Union address. Yost noted REALTORS® support his proposal to significantly reduce monthly mortgage payments by streamlining the refinancing process.

"Everyone suffers when families lose their homes. We urge government and lenders to help keep more people in their homes by taking more aggressive steps to modify loans and help homeowners significantly reduce their monthly mortgage payments," said Yost.


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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