California pending home sales for May were flat from April, but posted double-digit gains from a year ago for the fourth straight month, according to the California Association of Realtors.
May marked the 13th consecutive month that pending sales were higher than the previous year, CAR data revealed.
CAR said the share of distressed sales continued to decline from 2011 levels, signaling a return of noninvestors to the housing market.
Equity sales—nondistressed properties—in May rose to 59.3% of the overall total, up from 55.8% in April. In May 2011, equity sales accounted for 51% of housing activity.
Out of the 40.7% distressed properties that were sold in May, REO sales made up 21% of the total. This is down from 23.2% in April and 28.4% in May 2011. The available supply of REOs for sale also fell from a two-month supply in April to 1.5 months in May.
Meanwhile, the share of short sales also declined in May to 19.4%, down both from the previous month and a year ago, which was 20.6% and 20.3%, respectively.
“Despite a slowdown in economic growth in recent months, sales in California remain strong as record low mortgage rates and favorable home prices continue to fuel demand in the housing market,” said CAR president LeFrancis Arnold.
“The strong results in pending sales—double-digit year-over-year gains in the last nine out of 10 months—suggest solid housing market performance for the state in the upcoming months.”
