California Purchase Contracts up for First Time in 3 Months

Contracts for home purchases in the Golden State increased in October, the first such increase in three months the California Association of Realtors® (C.A.R.) said today.  The state's Pending Home Sales Index (PHSI) was up 2.5 percent from September to October, rising from 106.7 to 109.3.  C.A.R. said this jump was considerably larger than what has been the average September-to-October change of 0.7 percent over the last five years.  Pending sales were down from its index value of 121.2 in October 2012.  This was an annual decrease of 9.9 percent.

Equity or non-distressed property sales were down slightly in October while correspondent share of distressed sales of course increased.  Equity sales represented more than eight out of ten sales for the fourth straight month but did dip from 85.7 percent of sales to 85.5 percent.  The equity-to-distressed sales ratio was 63.2 : 36.8 percent in October 2012.  Sixteen of the 38 counties reporting on distressed sales reported a decline in October; San Mateo County had the lowest proportion of distressed sales at 3 percent.

The short-sale component of distressed property sales was virtually unchanged at 9.4 percent in October, one basis point below September's number.  This is the lowest percentage since January 2009 and well below the 24.4 percent market share in October 2012.

The share of REO sales rose slightly in October from 4.4 percent to 4.7 percent but it was the seventh consecutive month the figure was in single digits.  A year earlier REO made up 12 percent of sales.

Housing inventory levels tightened slightly for the first time in five months but were still extremely low.  The Unsold Inventory Index for equity sales dipped from 3.5 months in September to 3.4 months in October.  The supply of REOs was unchanged from September at 2.7 months, but the supply of short sales slipped from 3.8 months in September to 3.6 months in October.