IE Business Daily Business news for the Inland Empire.
Despite below-average interest rates, pending home sales in California dropped for the fourth consecutive month in July, a sign that the state housing market continues to underperform.
The Pending Home Sale Index dropped 2.3 percent, from 107 in June to 104.5 last month, according to a report released Tuesday by the California Association of Realtors.
Also, pending sales last month were down 9.2 percent compared with July 2013.
Year-over-year pending sales have now dropped every month since October 2012, but there was some good news in this month’s data: the drop in July was lower than the average year-over-year drop of the past six months, so the decline in pending sales appears to be slowing down, the report stated.
A pending sale means a contract has been signed but the deal has yet to be completed. Realtors and others in the homebuilding industry watch pending sales data because it’s considered an accurate short-term indicator of where the market is headed.
The report does not break down pending sales by regions or counties.
Despite some recent improvement, the July data shows that the state housing market is still struggling to get back on its feet, said Lotus Lou, spokeswoman the Los Angeles-based association.
“It is what it is, an underperforming market,” Lou said. “Four straight months of [month-over-month] decline isn’t good. Maybe the year-over-year deceleration is more important, but the housing market is still struggling.”
On the positive side of the ledger, equity sales continued its upward trend, to 90.6 percent of all single-family home sales statewide, up from 90.3 percent in June. Non-distressed sales have been going up since the start of this year, according to the report.
Distressed sales accounted for 15 percent of all home sales in San Bernardino County last month, and 13 percent of all sales in Riverside County, a 10 percent year-over-year drop in both markets, according to the data.
