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Bob Khalsa: State’s pending sales at four-year high, share of distressed sales drops

Posted: March 14, 2013 2:00 a.m.
Updated: March 14, 2013 2:00 a.m.

Bob Khalsa

 

The recent rise of pending home sales to the highest level in nearly four years supports experts who believe California’s home resale market will achieve full bloom this spring.

Pending sales — a forward-looking indicator, which gauges future home sale activity — climbed 23 percent from the prior month and 1.4 percent compared to the prior January, according to the California Association of Realtors.

Pending sales here in the Santa Clarita Valley have slowed, partly due to seasonal factors, yet primarily related to the severe shortage of properties listed for sale. Yet, what happens statewide, sooner or later plays out locally.

January’s statewide monthly increase was the highest since March 2009, and greater than the month-to-month long-run average of 12.8 percent in the past four years.

“The strong increase in January’s pending home sales is an encouraging indication that we’ll kick off the spring homebuying season on a solid start,” said C.A.R. President Don Faught. “However, a low supply of available homes for sale will affect buyers, especially first-time buyers looking for more affordable, lower-priced homes, since they are having to compete with investors and all-cash buyers.”

C.A.R. statistics also found that the combined share of all distressed property sales dropped to 35.6 percent in January, down from 36.4 percent in December and down from 54.7 percent in January 2012.

The number of non-distressed property sales by owners who have equity in their property also showed significant gains. A year ago January equity sales make up a mere 45.3 percent of all closed escrows. This January, however, the number climbed to 64.4 percent, up from 63.5 percent in December.

If traditional equity sales are on the rise, that means other categories must be in decline: of the diminishing number of distressed properties, the share of short sales was 21.5 percent in January, down from 25 percent in December and down from 25.9 percent a year ago.

Similarly, the share of REO sales — Real Estate Owned properties acquired by lenders typically through foreclosure — stood at 13.7 percent in January. That was down from 28.4 percent in January 2012.

Bob Khalsa is President of the Santa Clarita Valley Division of the Southland Regional Association of Realtors. David Walker, of Walker Associates, co-authors articles for SRAR. The column represents SRAR’s views and not necessarily those of The Signal. The column contains general information about the real estate market and is not intended to replace advice from your Realtor or other realty related professionals.

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