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Article posted on 3/23/11
Author: Kelly Curtis

Pending Home Sales Spike In California

The California Association of Realtors (CAR) on Tuesday released its report on pending home sales for February. The group's Pending Home Sales Index was up more than 20 percent to a reading of 112.1 for the month, after January's index was revised to 93. The February number is still down 1.6 percent, however, from a year ago, when federal tax credits for homebuyers were still driving sales.

CAR President Beth L. Peerce said of the report: "The increase in pending sales is typical for this time of year, as we usually see a seasonal improvement in the spring." The percentage of sales accounted for by distressed properties, the group said, was 56 percent, up from 54 percent in January and 55 percent a year ago.

Realtors report that buyer confidence seems to be on the rise, but homebuyers' willingness to work with banks seems to be low. Buyers are not trusting the short sale process due to horror stories they've heard or experiences they've had themselves. A growing number of homeowners who were unwilling to put their homes on the market a year ago are changing their stance, realtors say.

Realtors all across California are reporting an increase in the number of short sales. This can be partially attributed, insiders say, to banks' increasing willingness to approve short sales. Realtors are also reporting an uptick in the number of equity listings on the market. These sellers are pricing their homes higher than what the market will accept, however, as evidenced by these homes receiving only 97 percent of asking price at close compared to other listings, which are bringing in an average of 99 percent of asking price.

The CAR report further showed that the median sales price for non-distressed properties in February was $370,000. This number is $95,000, or 34.5 percent higher than the median price for short sales.

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