Pending Home Sales Rise in California

The beginning of 2011 is showing positive signs in California as pending home sales increased in January by 13.6% from the previous month with an index of 93.6, according to the California Association of Realtors.

Pending home sales are forward-looking indicators of future home sales activity that provide information on the future direction of the market. An index value is based on contracts signed for the month.

“Pending sales typically rise in January form a seasonally slow November and December,” said Beth Peerce, president and CEO of CAR. “January’s pending sales should be reflected in higher existing sales activity in February and March and serve as a precursor to the spring home buying season.”

Distressed properties sold statewide in January was 54%, which was 4% higher than December, but down 2% from January 2010. REO properties made up 32% of the distressed sales, a 2% increase from the previous month.

Conventional sales made up the remaining 46% of sold properties in the state, which is a 4% decrease from December, but 2% higher from the same month in 2010.

Statewide short sales also were up in January to 22%, which is an increase from December and January 2010.

According to CAR, the median price of a nondistressed property sold in January was $367,150. REO properties sold for 85% lower than a conventional property at $198,000 and the average short sale sold at $265,500.