California's Short Sales at Lowest Since 2008

CF Funding is happy to share that California’s pending home sales increased significantly in March, while short sales dropped to a six-year low. According to the California Association of Realtors (CAR), “pending home sales increased more than usual [in March] and rose to the highest level in eight months… meanwhile, the share of short sales has fallen to levels last observed in 2008.”

Pending home sales increased 17.8 percent, and the PHSI (Pending Home Sales Index) rose from 97.1 in February to 114.4 in March. This is the highest index since July 2013. Although March of 2013 had about 9.9 percent more pending sales, the CAR says this decline “has been tapering over the past few months.” Equity sales, defined as non-distressed property sales, have increased over the past year and saw a 2.6 percent increase in March, reaching 87.6 percent. CF Funding expects that equity sales will continue to rise as the Spring season brings out more homebuyers and the economy continues to improve. In March 2013, equity sales made up only 71.8 percent of sales.

30 out of 38 counties in California saw a decrease in distressed sales month-to-month. Counties with the least amount of distressed sales included Alameda, Marin, San Diego, and Santa Clara. Alameda, Marin, and San Mateo also experienced the best year-over-year improvement (in reduced distressed sales), as well as Madera and Monterey counties. Declines in short sales and REO sales were significant across the state of California in March, falling from 15 to 12.4 percent. The C.A.R. says one year ago distressed sales were more than twice as high, reaching 28.2 percent.

As seen in the chart, equity sales have increased significantly since January 2012. Short sales and REO sales in California have drastically decreased, with REO sales declining 64 percent.

The inventory of properties declined in March (especially non-distressed), with the Unsold Inventory Index dropping from 4.8 months to 4 months, and the supply of REOs dropping from 3 months to 2.8 months. The short-sale inventory fell from 5 months in February to 4.7 months in March.

CF Funding is licensed in California, as well as Illinois, Colorado, Tennessee, Florida, and soon Texas and Virginia. Homebuyers in these states who are in need of a mortgage should contact CF Funding Corporation for a free consultation, as the lender compares rates and programs from multiple lenders. Call 888-344-4080 or visit www.cffunding.com for more information.