Meanwhile, equity sales rose to their highest level in nearly five years, the California Association of Realtors reported this week.
CAR's Pending Home Sales Index (PHSI) rose 8.7% from a revised 101.4 in January to 110.2 in February, based on signed contracts. Pending sales were down 8.2% from the 120 index recorded in February 2012. Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.
The share of equity sales, or non-distressed property sales, now makes up more than two-thirds of all home sales for the first time since April 2008. The share of equity sales in February increased to 67.1%, up from 64.4% in January. The February level marked the highest level since April 2008, when the share was 67.3%. Equity sales made up less than half (46.7%) of all sales in February 2012.
The combined share of all distressed property sales dropped to 32.9% in February, down from 35.6% in January and down from 53.3% in February 2012.
Of the distressed properties, the share of short sales was 19.9% in February, down from 21.5% in January and down from 24.8% a year ago.
The share of REO sales decreased from 13.7% in January to 12.6% in February and was down from 28% in February 2012.
The available supply of REOs remained tight in February, with the Unsold Inventory Index for REOs remaining unchanged from January at 2.0 months. The February Unsold Inventory Index for short sales was 3.3 months and 3.8 months for equity sales.