May Equity Home Sales Continue to Rise in California
Equity home sales have made up 80 percent of all home sales for the past 11 months. According to CAR, home equity sales are sales of any non-distressed property. The California Association of Realtors attributes this to higher home values. These rising home values have caused some investors to pull out of the market, with home sales receding slightly in May.
Since January equity home sales have been on the rise. The last time equity home sales were below 80 percent was my 2013. CAR found that the share of equity home sales rose from 88.4 percent in April to 89.2 percent in May. Distressed properties continued to decline in the month of May. This can be attributed to a decline in REO sales according to CAR. The group commented, “The share of distressed property sales was down from 11.6 percent in April to 10.8 percent in May. Distressed sales continued to be down by more than 50 percent from a year ago, when the share was 22 percent.”
Short sales constitute a share of the distressed property market. These levels have dropped to 5.6 percent, which is the lowest since late 2007. This figure is down year-over-year when May 2013 saw 14 percent of properties being short sales. REO sales saw a significant decrease from 7.6 percent in May 2013 to 4.7 percent in May 2014.
CAR noted, “The Unsold Inventory Index for equity sales edged up from 3.6 months in April to 3.7 months in May, and from 2.3 months in April to 2.4 months in May for REO sales. The supply of short sales dipped from 4.4 months in May to 4.3 months in April.”
There was a decrease in pending home sales in California during the month of May. Month-over-month there was a decrease of 3.4 percent.