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California Home Sales Slow Despite Low Interest Rates

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(credit: Thinkstock)

(credit: Thinkstock)

LOS ANGELES (CBSLA.com) — In spite of extremely low interest rates, California’s real estate market continued to cool off this summer, with pending home sales figures dipping for the fourth straight month, the California Association of Realtors reported Tuesday.

The Pending Home Sales Index dropped 2.3 percent from 107 in June to 104.5 in July, based on signed contracts, CAR reported in a statement. The month-to-month drop was consistent with seasonal trends. Pending sales were down 9.2 percent from the 115.1 index recorded in July 2013.

According to the group, pending home sales are forward-looking indicators of future home sales activities, providing information on the future direction of the market. They have been down year to year since October 2012, but CAR says the pace appears to be slowing July’s decrease was smaller than the average in the last six months.

The share of equity sales, or non-distressed property sales, continued to climb, rising in July to 90.6 percent, up from 90.3 percent in June, according to CAR. Equity sales have been rising steadily again since the beginning of this year.

Equity sales have been more than 80 percent of total sales for more than two years and have risen above 90 percent for the second straight month. CAR says equity sales made up 82.8 percent of sales in July 2013.

The combined share of all distressed property sales declined further in July, dropping from 9.7 percent in June to 9.4 percent in July. Distressed sales continued to be down more than 50 percent from a year ago, when the share was 17.2 percent, according to CAR.

(©2014 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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