Equity home sales in California continue their upward trend. The non-distressed sales posted their highest level since the housing crisis began, reaching more than 90 percent of all home sales in June. Meanwhile, seasonal factors, combined with shrinking affordability placed a dent on pending home sales in June, according to the latest information from the California Association of REALTORS® (C.A.R.).
C.A.R. reports the share of equity sales rose to 90.3 percent in June, up from 89.2 percent in May. June marks a full year that equity sales have been more than 80 percent of total sales and the first time they have risen above 90 percent. Equity sales made up 79.7 percent of sales in June 2013.
The combined share of all distressed property sales declined further in June, dropping from 10.8 percent in May to 9.7 percent in June. The share of distressed sales was 20.3 percent a year ago.
Twenty-three of the 41 reported California counties showed a month-to-month decrease in the share of distressed sales, with 17 of the counties recording in the single-digits, including Alameda, Butte, Contra Costa, Marin, San Diego, San Luis Obispo, San Mateo, and Santa Clara counties — all of which registered a share of five percent or less.
June's share of distressed sales in San Mateo County was 3 percent, no change from May and down from7 percent in June last year. Santa Clara County's share of distressed sales was a mere 2 percent, compared to 3 percent in May and 7 percent in June 2013.
Of the distressed properties, the share of short sales fell to its lowest level since February 2008, falling to 5 percent in June, down from 5.6 percent in May and 12.9 percent recorded in June 2013. The share of REO sales fell in June to 4.4 percent, down from 4.7 percent in May and from 6.8 percent in June 2013.
"Distressed sales, which were a bargain for buyers a couple of years ago, are virtually non-existent in Santa Clara and San Mateo counties. Rising prices of homes in Silicon Valley have become a challenge for buyers so much so that the shrinking affordability is cooling pending home sales," said David Tonna, president of the Silicon Valley Association of REALTORS® (SILVAR).
Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market. California pending home sales fell in June, with the C.A.R. Pending Home Sales Index posting a 2.8 percent drop from 110.1 in May to 107 in June, based on signed contracts. Pending sales were down 5.9 percent from the revised 113.8 index recorded in June 2013.
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.