Pending home sales in California experienced the first double digit drop in over a year in November, falling 13.6 percent from October to a Pending Home Sale Index level of 93.8.  The Index, based on signed contracts for home purchases, was down 9.4 percent from the 103.5 level of November 2012.  The California Association of Realtors® (C.A.R.) blamed the November decline partially on seasonal factors but noted that shrinking home affordability also played a role.

The Pending Home Sale Index is a leading indicators of closed sales, which typically follow within 60 days.

C.A.R. also reported that equity or non-distressed property sales increased their market share in November to 86.4 percent.  It was the fifth straight month that equity sales surpassed 80 percent of all sales; they were at an 85.4 percent level in October.  In November 2012 equity sales made up only 64.6 percent of the market. 

Short sales accounted for 8.8 percent of November sales, down from 9.5 percent in October and 23.3 percent a year earlier.  Sales of foreclosed property (REO) had a 4.4 percent share compared to 4.7 percent in October and was the fourth straight month that REO sales constituted less than 5 percent of all sales.  One year earlier 11.8 percent of sales were REO.  Twenty-one of the 38 counties responding to C.A.R.'s survey showed a month-over-month decrease in distressed sales with Santa Clara County having the lowest share at 4 percent.

Housing inventory levels improved slightly for the second consecutive month but were still extremely low.  The Unsold Inventory Index for equity sales inched up from 3.4 months in October to 3.6 months in November.  The supply of REOs rose from 2.7 months in October to 3.4 months in November, and the supply of short sales increased from 3.6 months in October to 4.2 months in November.

C.A.R.'s pending sales information is generated from a survey of more than 70 associations of Realtors and Multiple Listing Services throughout the state. The year 2008 was used as the benchmark for the Pending Homes Sales Index.  An index of 100 is equal to the average level of contract activity during 2008.