Buyers are realizing that they have a golden opportunity in this market with California home prices down and interest rates still at historic lows. For the sixth consecutive month, pending home sales in the state were up in October, the California Association of REALTORS® reported this week.
California pending home sales climbed 3.1 percent in October and from a year ago, according to C.A.R.'s Pending Home Sales Index (PHSI). The index was 122 in October, based on contracts signed in that month, up from September's index of a revised 118.2. The index also was up 10.7 percent from October 2010. October marked the sixth consecutive month that pending sales rose from the previous year.
"October's increase in pending sales is encouraging, especially the six straight months of year-over-year increases," said C.A.R. President LeFrancis Arnold. "Despite all the challenges the housing market has faced this year, California home sales continue to perform modestly well and should be on pace to match or better last year's level."
Data from MLSListings Inc., the multiple listing service of the Silicon Valley Association of REALTORS®, shows Santa Clara County had 2,230 single-family home sales under contract in October, down from 2,486 in October 2010 and 2,434 in September 2011. REALTORS® in the region say the reduced conforming loan limits may have dampened sales, but they are hopeful this will change now that Congress has extended the FHA higher loan limits. "With the FHA loan limits extended, there's a good chance we will see higher sales in our high-cost market in the future," said Gene Lentz, president of the Silicon Valley Association of REALTORS® (SILVAR).
Additionally, distressed home sales rose in October from both the previous month and year. At 53.9 percent, equity sales made up more than half of home sales in October, down from 55.5 percent in September and 55.2 percent in October 2010. While equity sales have edged down from their peak of 57.1 percent in July 2011, they are up from the beginning of the year when less than half (46.5 percent) of sales were non-distressed.
The total share of all distressed property types sold statewide rose to 46.1 percent in October, up from September's 44.5 percent and 44.8 percent in October 2010. Of the distressed properties sold statewide in October, 20.7 percent were short sales, slightly up from the previous month's share of 20.1 percent and up from last October's share of 19.7 percent. At 24.9 percent, the share of REO sales was up from September's 24 percent, and slightly up from the 24.8 percent reported in October 2010.
Single-family distressed home sales made up 34 percent of total home sales in Santa Clara County in the month of October, up from 33 percent the same time in the previous year and slightly down from 35 percent in the previous month. Single-family distressed home sales made up 23 percent of total sales in San Mateo County in October, down from 25 percent in the previous year and down from 26 percent in the previous month.
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.