The California Association of REALTORS®' pending home sales index jumped 14.2 percent in February, from 84.8 in January to 96.8. Though still below the level of a year ago, the strong gains in February indicate the housing market may see more activity by spring, according to REALTOR® officials.
The state's pending home sales were down 12 percent from the 110.1 index recorded in February 2013. Pending home sales posted stronger than average gains in February for the second straight month. Pending home sales provide information on the future direction of the market.
"The rise in pending home sales means market activity is starting to pick up," said David Tonna, president of the Silicon Valley Association of REALTORS®.
In Santa Clara County, MLSListings Inc. data reveals there were 1,064 single-family home sales under contract in February, compared with 921 in January. There were 1,327 single-family home sales under contract in February 2013. San Mateo County had 378 single-family home sales under contract in February, 305 in January, and 514 in February 2013.
Tonna said there continues to be a strong demand for homes in the valley, but sales are constricted due to the lack of housing supply. "The demand for homes is there, but there are few homes to buy. Sellers are reluctant to put their house on the market because they don't have anywhere to go," said Tonna.
Distressed properties – short sales and REOs (bank-owned properties) used to make up a large share of the market inventory. The share of distressed property sales have now continued shrink by more than a half from a year ago, when the share was 33.3 percent. The combined share of all distressed property sales dipped from 15.6 percent in January to 15 percent in February.
Conversely, the share of equity sales – or non-distressed property sales – increased to 85 percent in February, up from 84.4 percent in January. February marked the eighth straight month that equity sales have been more than 80 percent of total sales. Equity sales made up 66.7 percent of sales in February 2013.
San Diego and San Francisco Bay Area counties had the smallest share of distressed property sales, according to the C.A.R. In Santa Clara County, the share of single-family distressed home sales was just 7 percent in February 2013, compared to 8 percent in the prior month, and 17 percent in February 2013. In San Mateo County, distressed home sales accounted for 6 percent of total sales in February, down from 7 percent in January and 19 percent in February last year.
"This is good news because that means there are fewer homes that are underwater. This is also why inventory has shrunk, since families are staying put now that they finally are seeing equity in their homes," said Tonna.
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.