May sales of real estate-owned properties in California fell into the single digits for the second straight month, descending to the lowest level since October 2007, analysts claim.
The share of REO sales in the state hit 7.2% in May, down from 9.2% in April and also down 22.8% from a year ago, according to the California Association of Realtors.
Meanwhile, the share of equity home sales continued to grow in May, making up nearly four of every five home sales.
The combined share of distressed property sales was 21.8% in May, down from 24.4% in April and also down 44.2% from last year.
The share of all distressed sales in 31 of the 36 reported California counties also declined significantly from the previous year, with Contra Costa, Marin, San Diego, San Mateo and Santa Clara recording single-digits in May, CAR explained.
The share of non-distressed property sales increased further in May and now makes up more than 75% of total sales, the highest share since January 2008.
For instance, the share of equity sales increased to 78.2% in May, up from 75.6% in April and also up more than 55.8% from last year.
Of the distressed properties, the share of short sales dropped to 14% in May, down from 14.8% in April and also down from 21% a year ago.
The continuing decline in short sales indicates more previously underwater homes are moving into positive equity, indicating the lowest figure since July 2009.
The available supply of homes remained tight in May, but was relatively unchanged from April.
For instance, inventory for REOs was unchanged at a 1.7-month supply.
Additionally, the supply of short sales dripped from 2.7 months in April to 2.3 months in May.
Meanwhile, the supply for equity sales was 2.8 months in May, down from 2.9 in April.
Pending home sales edged up 0.3% in May to 122.1, rising from 121.7 in April, but was down 3.1% from the 125.9 index recorded a year ago.