California Pending Home Sales Lower in June

A continued lack of housing inventory and slowing economy sent California pending home sales lower in June, but pending sales were still higher than the previous year for the fourteenth straight month, C.A.R. reported Tuesday. 

C.A.R.’s Pending Home Sales Index (PHSI) fell 3.8 percent from a revised 126.1 in May to 121.4 in June, based on signed contracts.  Pending sales were up 4.7 percent from the 115.9 index recorded in June 2011.  June marked the fourteenth consecutive month that pending sales were higher than the previous year, although June’s year-over-year increase was the smallest since April 2011.  Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

“Pending sales declined in June, partly due to a lack of housing supply – especially in REO properties,” said C.A.R. President LeFrancis Arnold.  “The shortage of REO inventory is also putting upward pressure on bank-owned home prices, with the median price of REO properties showing a double-digit year-over-year gain of 11 percent in June.”

The available supply of REOs for sale tightened slightly in June, with the Unsold Inventory Index declining from a 1.5-month supply in May 2012 to 1.4 months in June 2012.  The June Unsold Inventory Index for equity sales stood at 3.7 months and was 5.3 months for short sales.

In contrast, the Zillow Home Value Index rose in the second quarter on an annual basis for the first time since 2007, increasing 0.2 percent year-over-year to $149,300, according to Zillow's Real Estate Market Reports. Values have risen for four consecutive months.

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