The California Association of REALTORS® (C.A.R.) this week reported pending home sales in the state were down for the fifth straight month in August. Rising home prices are impacting housing affordability, but have contributed to the share of distressed home sales in the state falling to as low as 2 percent and 1 percent in Santa Clara and San Mateo counties, respectively.
C.A.R.'s pending home sales index, which provides information on the future direction of the market, fell in August, dropping 4.5 percent from 104.5 in July to 99.8 in August, based on signed contracts. Pending sales were down 8.7 percent from the 109.3 index in August 2013.
"Rising home prices have caused buyers to step back from the market, including investors. On a positive note, with still low interest rates and less competition from investors, there may be more chances for first-time buyers to purchase a home," said David Tonna, president of the Silicon Valley Association of REALTORS®.
Santa Clara County saw an increase in the number of home sales under contract last month. According to MLSListings Inc., Santa Clara County had 1,187 single-family home sales under contract in August, up 6.6 percent from 1,113 single-family home sales under contract in July. The August 2014 pending sales were down nearly 19 percent from a year ago, when there were 1,460 single-family home sales under contract in August 2013.
The appreciation in home prices benefits California homeowners who were previously underwater. Non-distressed property sales have accounted for more than 80 percent of total sales for more than a year and have risen above 90 percent for two straight months.
According to C.A.R.'s August equity and distressed sales report, the share of equity sales increased from 90.3 percent in July to 91 percent in August. Equity sales made up 84.6 percent of sales in August 2013.
Conversely, the combined share of all distressed property sales fell from 9.7 percent in July to 9 percent in August. Distressed sales continued to be down nearly 50 percent from a year ago, when the share was 15.4 percent. Twenty-two of the 41 reporting counties reported a month-to-month decrease in the share of distressed sales, with 19 of the counties recording in the single-digits. The counties of Alameda, Contra Costa, Marin, Napa, Orange, San Mateo, Santa Clara, and Sonoma all had a share of five percent or less.
The combined share of all distressed property sales in Santa Clara County has fallen from 4 percent in August 2013 to 2 percent in August this year. San Mateo County's share of distressed sales fell to 1 percent this year from 3 percent in August 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.