California pending home sales highest level in nearly three years

California pending home sales posted higher for the third consecutive month in March, rising from both the previous month and year, the California Association of Realtors reported Tuesday. Additionally, the share of distressed sales dropped for the second consecutive month, as equity sales typically increase with the start of the spring home buying season.

C.A.R.’s Pending Home Sales Index (PHSI)* rose from a revised 126.5 in February to 143.7 in March, based on signed contracts. The March 2012 index was the highest since April 2009, when the PHSI was 146.9. The index also was up from the 128.9 index recorded in March 2011, marking the eleventh consecutive month that pending sales were higher than the previous year. Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.
• The share of equity sales – or non-distressed property sales – compared with total sales increased in March to 55.4, up from 51.1 percent in February. Equity sales made up 50.2 percent of all sales in March 2011.
• Meanwhile, the total share of all distressed property types sold statewide decreased in March to 44.6 percent, down from February’s 48.9 percent and from 49.8 percent in March 2011.
• The share of short sales was down again in March. Of the distressed properties sold statewide in March, 21.1 percent were short sales, down from February’s share of 23 percent but up from last March’s share of 20.1 percent.
• The share of REO sales also declined in March to 23.1 percent, down from February’s 25.2 percent and down from the 29.4 percent recorded in March 2011.