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Ed Fuller: Higher Prices Buoy More Underwater Homes

By Ed Fuller |

A new report from the California Association of Realtors noted that with recent home price gains, more underwater homes have been lifted into positive equity territory, pushing the share of distressed home sales statewide to their lowest level since late 2007.

Ed Fuller
Ed Fuller

The share of equity sales — or nondistressed property sales — continued to increase in April, rising to 88.4 percent in April, up from 87.6 percent in March, rising steadily since the beginning of this year.

Distressed sales continued to be down by more than 50 percent from a year ago, when the share was 24.6 percent, to 11.6 percent this April. For the Santa Barbara metro area, April's distressed sales reported to the Multiple Listing Service were only 5 percent, less than half the statewide level.

Of the distressed properties statewide, the share of short sales last month dropped to levels last observed in April 2008 at 5.9 percent, nearly a third of the 14.7 percent recorded in April 2013.

The share of REO sales dipped in April to 5.3 percent, nearly half of what they were a year ago, when REOs made up 9.4 percent of all sales in April 2013.

Statewide, a drop in active listings of equity and REO properties tightened the housing supply in April, causing a decline in unsold inventory across all property types.

The Unsold Inventory Index (currently active listings divided by sold listings for the month) for equity sales dropped from four months in March to 3.6 months in April.

The supply of REOs slipped from 2.8 months in March to 2.3 months in April, and the supply of short sales declined from 4.7 months in March to 4.4 months in April.

The current active listing single family inventory for the Santa Barbara metro area is 3.3 months, slightly lower than the statewide level, but our active listing single-family median list price is currently $2.75 million, meaning half our inventory is priced over $2.75 million.

Ed Fuller is a real estate broker with San Roque Realty Inc. and president of the Santa Barbara Association of Realtors. Contact him at [email protected] or 805.687.1551. The opinions expressed are his own.




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