Higher home values have continued to fuel more equity home sales, making up more than 80 percent of all home sales for the past 11 consecutive months, according to the California Association of Realtors (CAR). The group noted that pending home sales receded slightly in May, as investors pulled out of the market due to higher home prices.
The group considers equity home sales as any non-distressed property sales.
CAR found that the share of equity home sales rose to 89.2 percent in May, up from 88.4 percent in April. Since the beginning of the year, equity home sales have been steadily rising. The last time non-distressed property sales were sub-80 percent was in May 2013.
Distressed properties, as a share of total properties, continued to decline in May. CAR cited a decline in REO sales as the primary motivator behind the drop. The group commented, "The share of distressed property sales was down from 11.6 percent in April to 10.8 percent in May. Distressed sales continued to be down by more than 50 percent from a year ago, when the share was 22 percent."
As a share of all distressed properties, short sales dropped to levels last seen in late 2007 at 5.6 percent. May's figure was below April's figure of 5.9 percent. May's figure was down year-over-year from May 2013's percentage of 14 percent. The share of REO sales fell in May to 4.7 percent, down from 5.3 percent in April and from 7.6 percent in May 2013.
The supply of available homes increased. CAR noted, "The Unsold Inventory Index for equity sales edged up from 3.6 months in April to 3.7 months in May, and from 2.3 months in April to 2.4 months in May for REO sales. The supply of short sales dipped from 4.4 months in May to 4.3 months in April."
Pending home sales also drew back in California for the month of May, with the Pending Home Sales Index dropping 3.4 percent from a revised 114.1 in April to 110.1 in May. The group noted that an index of 100 is equal to the average level of contract activity during 2008.