California distressed housing market improves in March; pending sales rise

LOS ANGELES, CA – April 20, 2011 – (RealEstateRama) — The share of distressed homes sold in March declined from February, but was unchanged from a year ago,  the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“Consistent with the state as a whole, nearly all the counties for which we have data also experienced an improvement in distressed sales,” said C.A.R. President Beth L. Peerce.  “However, distressed sales in most of the counties were higher than a year ago, as the market continues to work through large numbers of troubled mortgages.”

Distressed housing market data:

• The total share of all distressed property types sold statewide declined in March to 51 percent, down from 56 percent in February and unchanged from 51 percent in March 2010.

• Non-distressed sales made up the remaining share at 49 percent in March, up from 44 percent in February but unchanged from 49 percent in March 2010.

• Of the distressed properties sold statewide, the total share of REO (real estate-owned) sales was 31 percent in March, down from 33 percent in February, and down from 32 percent in March 2010.

• The statewide share of short sales also dropped in March to 20 percent, down from 23 percent in February but up from 19 percent in March 2010.

• The median price of homes sold in the state varied dramatically depending on the property type, with non-distressed properties selling for much higher prices than short sales and foreclosures.  Price differences across short sales, REOs and non-distressed properties reflect variances in the condition of the property, with REOs typically being in worse condition than short sales and non-distressed properties.  A seller’s circumstance, such as needing to sell under duress, is also a factor.

• The statewide median price of non-distressed properties sold in March was $386,500, $111,800 or 41 percent higher than the short sale median price of $274,700 recorded in March, and $181,500 or 88 percent higher than the March REO median price of $205,000.

Pending home sales:

March pending home sales in California rose from February, according to C.A.R.’s Pending Home Sales Index (PHSI)*.  The index was 128.7 in March, rising 15.2 percent from February’s revised index of 111.7, based on contracts signed in March.  The index was down 0.3 percent from March 2010, when the presence of housing tax credits played a strong role in home sales.  Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.
Multimedia:

• View a video of C.A.R. Chief Economist Leslie Appleton-Young discussing highlights of the March existing home sales and price report, which was released April 14.
• View a chart of pending sales compared with closed sales.
• View a chart showing the price differential by sales type.

Share of Distressed Sales to Total Sales
(Single-family)

Single-family Distressed Home Sales by Select Counties
(Percent of total sales)

*Note:  C.A.R.’s pending sales information is generated from a survey of more than 70 associations of REALTORS® and MLSs throughout the state.  Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market.  A sale is listed as pending after a seller has accepted a sales contract on a property.  The majority of pending home sales usually becomes closed sales transactions one to two months later.

The year 2008 was used as the benchmark for the Pending Homes Sales Index.  An index of 100 is equal to the average level of contract activity during 2008.
Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles