THE CALIFORNIA ASSOCIATION OF REALTORS released a number of reports at the end of January reflecting a steadily improving and healthy real estate market.

In an indication of improving inventories, pending home sales in December increased year over year for the first time since January 2013. After a seasonal slowdown in December sales in which pending home sales declined 21.9 percent when compared to November, declining interest rates and an improving economy were cited as the reasons for January’s increased activity.

Foreclosure and short sale activity in the state increased slightly for the second straight month, accounting for 10.2 percent of real estate sales activity in December, up from 9.5 percent in November. Still, the numbers are substantially improved when compared to a year ago, when distressed sale activity accounted for 15.6 percent.

Diving deeper into the numbers, the percentage of homes sold as foreclosures (bank-owned) and short sales was close to even in November and December. Compare this to December 2013, when short sale activity was double the amount of foreclosures.

There are still a significant percentage of homeowners in the state who are underwater. Primarily these are homeowners who purchased at the peak in 2006 and 2007 or who refinanced to take cash out of their properties during that same period. The number of underwater homeowners accounts for higher-than-normal levels of loan delinquencies and distressed property sales. Hardly anyone even knew what short sales were 10 years ago, but at the height of the meltdown short sales became the most common method of selling a property. Today they represent about 5 percent of overall property sales in the state, and far less in some areas.

As home values increase, fewer and fewer homeowners are in a negative equity position, and more can therefore sell their homes for a less than full balance payoff without getting lender approval.

Home prices continued to stabilize in the fourth quarter of 2014, with 24 percent of homes selling for more than the asking price, compared to 46 percent in the first quarter of 2014. The percentage of homes selling for less than the original asking price increased to 48 percent in the fourth quarter compared to just 19 percent in the first quarter. Homes selling at the original asking price dropped steadily over 2014. In the first quarter, 34 percent of homes sold were at the asking price; that number in the fourth quarter was 28 percent.

In really good news for buyers, Realtors are reporting fewer homes receiving multiple offers. Homes selling with multiple offers declined to 58 percent in the fourth quarter; 69 percent of homes were sold with multiple offers in the first quarter.

Overall it seems the California housing market continues its march back to normalcy and overall good health.

Of course there are still pockets of extreme hardship in the state, mostly in rural counties where swings in the economy have the greatest impact.

Guy Benjamin (CAL BRE License #01014834, NMLS 887909) writes a weekly column for The Herald, offering general information on real estate matters. As it is impossible to address all possibilities and variations, he will try to answer individual questions by readers who contact him at 707-246-0949 or guyb@fairwaymc.com.height=”150″ />

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