The California Association of Realtors® (C.A.R.) reports that May sales of bank-owned properties (REO) were at the lowest level since October 2007. Equity home sales (i.e. non-distressed property sales) grew to nearly four out of every five sales while sales of foreclosed homes were in the single digits for the second straight month, falling from 9.2 percent in April to 7.3 percent in May. REO properties accounted for 22 percent of home sales in May 2012.

The share of the market going to short sales remained relatively unchanged, easing down from 14.8 percent in April to 14 percent in May. The combined share of depressed property sales was down year-over-year in 31 of the 36 California counties reporting.  Equity sales increased to 78.2 percent in May from 75.6 percent n April. Equity sales had a 55.8 percent market share in May 2012.

Except for REO, inventories of available homes fell again in May. The supply of unsold REO homes was unchanged at 1.7 months but the supply of short sales dropped from 2.7 months to 2.3 months and the supply of unsold equity properties decreased slightly to 2.8 from 2.9 months.

C.A.R.'s Pending Home Sales Index (PHSI) edged up 0.3 percent in May to 122.1, up from 121.7 in April, based on signed contracts.  Pending sales were down 3.1 percent from the 125.9 index recorded in May 2012.  Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.