California pending home sales jump in May

Inman News

Pending home sales in the nation's most-populous state rose by double-digits in May compared to the same month a year ago, according to a monthly index from the California Association of Realtors.

CAR's Pending Home Sales Index remained unchanged from April's revised figure. But the index jumped 11.2 percent from May 2011, to 128.8.

The index, which tracks purchase contracts signed but not yet closed, is considered a forward-looking indicator of future home sales activity with the majority of pending sales closing within one to two months, CAR said. An index level of 100 is equal to the average level of contract activity in California in 2008.

May was the fourth straight month to see a double-digit, year-over-year index increase.

"Despite a slowdown in economic growth in recent months, sales in California remain strong as record low mortgage rates and favorable home prices continue to fuel demand in the housing market," said LeFrancis Arnold, CAR's president, in a statement.

"The strong results in pending sales -- double-digit year-over-year gains in the last nine out of 10 months -- suggest solid housing market performance for the state in the upcoming months."

California's share of distressed sales fell in May, to 40.7 percent of total sales, from 49 percent in May 2011. The shares of both REOs (real estate-owned homes) and short sales declined, though short sales to a smaller extent, to 21 percent and 19.4 percent, respectively.

Share of distressed sales to total sales (single-family):

Type of sale May-11 Apr-12 May-12
Equity sales 51.0% 55.8% 59.3%
Total distressed sales 49.0% 44.2% 40.7%
     REOs 28.4% 23.2% 21.0%
     Short sales 20.3% 20.6% 19.4%
     Other distressed sales (not specified) 0.3% 0.4% 0.3%
All sales 100.0% 100.0% 100.0%

Source: California Association of Realtors

Of 28 selected California counties, distressed sales accounted for at least half of total sales in 13, according to CAR. The three counties with the highest share of distressed sales were Madera (79 percent), Lake (70 percent), and Solano (70 percent).

Single-family distressed home sales by select counties (percent of total sales):

County May-11 Apr-12 May-12
Amador 61% 41% 50%
Butte 44% 44% 37%
Fresno 63% 62% 57%
Humboldt 17% 36% 34%
Kern 66% 54% N/A
Lake 80% 64% 70%
Los Angeles 45% 44% 41%
Madera 85% 67% 79%
Marin 28% 29% 21%
Mendocino 51% 67% 44%
Merced 59% 58% 54%
Monterey 59% 55% 52%
Napa 43% 41% 44%
Orange 36% 33% 33%
Riverside 65% 56% 54%
Sacramento 65% 61% 58%
San Benito 66% 56% 59%
San Bernardino 69% 57% 59%
San Diego 29% 23% 23%
San Luis Obispo 40% 44% 35%
San Mateo 23% 24% 21%
Santa Clara 34% 27% 28%
Santa Cruz 41% 49% 33%
Siskiyou 82% 62% 54%
Solano 71% 69% 70%
Sonoma 48% 44% 45%
Tehama 62% 58% 65%
Tuolumne N/A 61% 46%
California 49% 44% 41%

Source: California Association of Realtors

In a separate report released last week, CAR reported the state's highest annual jump in existing, single-family home sales last month since May 2009 -- a 21.5 percent increase to a seasonally adjusted annualized rate of 572,260. The state median home price rose on both a month-to-month and year-over-year basis for the third straight month in May to $312,110 -- the highest median since September 2010, CAR said.

The trade group also noted a shortage of for-sale homes in the state with inventory at the same level as in December 2005 -- a 3.5 months' supply, down from 5.7 months in May 2011. 

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