The California Association of REALTORS® reports the share of equity home sales in California continued to grow in May. In fact, today nearly four of every five home sales are non-distressed property sales. This is a good sign for the state's housing market and experts note, the state is leading the nation's market recovery.
The share of equity sales in May increased to 78.2 percent making up more than three-fourths of total sales, the highest share since January 2008. Equity sales accounted for 75.6 percent of total sales in April and more than half (55.8 percent) of all sales in May 2012.
Meanwhile, the combined share of all distressed property sales in May dropped to 21.8 percent in May, down from 24.4 percent in April and down from 44.2 percent in May 2012. The share of all distressed sales in 31 of the 36 reported counties also declined significantly from the previous year, with Contra Costa, Marin, San Diego, San Mateo, and Santa Clara counties recording in the single-digits in May.
In Santa Clara County, distressed home sales accounted for just 7 percent of total home sales compared with 10 percent in April and 28 percent in May 2012. In San Mateo County, distressed sales made up just 4 percent of all home sales, down from 11 percent in April and 21 percent in May of last year.
"The growing share of equity sales is a sign that California's housing market has recovered. This indicates more homes that were previously underwater are moving into positive equity," said Carolyn Miller, president of the Silicon Valley Association of REALTORS®.
In Silicon Valley, Miller reports pent-up demand for homes continues. "Inventory, while improving, still can't match the high demand for homes. The situation is contributing to rising home prices," said Miller. "We may see prices ease as more sellers realizing equity gains decide it's time to put their home on the market and perhaps move up."
The share of short sales in California was 14 percent in May, down from 14.8 percent in April and down from 21 percent a year ago. Sales of REOs fell into the single-digits for the second straight month to 7.3 percent in May, from 9.2 percent in April and 22.8 percent in May 2012.
Most parts of the nation's housing market appear to be recovering, as well. The National Association of REALTORS® reports distressed home sales nationwide accounted for 18 percent of May sales, unchanged from April, but matching the lowest share since monthly tracking began in October 2008. They were 25 percent in May 2012.
Eleven percent of May home sales nationwide were foreclosures and 7 percent were short sales. Foreclosures sold for an average discount of 15 percent below market value in May, while short sales were discounted 12 percent.
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 email or call the SILVAR office at (408) 200-0100.