The month of September saw pending home sales in California post the first increase in six months, reversing the sales decline usually observed between August and September. Meanwhile, equity home sales made up nine in 10 home sales for the fourth straight month, according to the California Association of REALTORS® (C.A.R.).
C.A.R.'s Pending Home Sales Index rose 2.6 percent from 99.8 in August to 102.4 in September, based on signed contracts. The increase was significantly above the average August-to-September month-to-month change of -3 percent observed in the past six years. Pending sales dipped 0.5 percent from the 102.9 index recorded in September 2013.
Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market. "This data means buyers are becoming active again and want to take advantage of low interest rates before the year ends," said David Tonna, president of the Silicon Valley Association of REALTORS®. "We could see a more active market from now till the end of the year."
C.A.R. also reports California equity sales remained virtually unchanged in September. Equity sales made up 90.9 percent of all sales in September, essentially flat from the 91 percent recorded in August. Equity sales have been more than 80 percent of total sales since July 2013 and have risen to or above 90 percent for the fourth straight month. The non-distressed sales made up 85.7 percent of sales in September 2013.
The combined share of all distressed property sales was essentially unchanged from 9 percent in August to 9.1 percent in September. Distressed sales were down nearly 40 percent from a year ago, when the share was 14.3 percent.
Fourteen of the 41 reporting counties showed 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 Benito, San Diego, San Mateo, Santa Clara, and Santa Cruz all registered a share of five percent or less.
The share of distressed sales in Santa Clara County was 4 percent in September last year, dropped to 2 percent in August and rose slightly to 3 percent in September 2014. In San Mateo County, distressed sales made up 4 percent of total home sales in September 2013, fell to 1 percent in August 2014 and moved up to 3 percent in September 2014.
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.
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