The lack of housing inventory available for sale is driving down the number of pending sales, the California Association of Realtors, a real estate industry trade group, reports.

The number of pending home sales, defined as properties under contract to be sold but not yet having closed escrow, fell 20.5 percent across the state last month as compared to November 2012, and December’s numbers were down 6.5 percent from a year ago.

An increasing number of buyers electing to test the waters after sitting out the housing crash of 2006-2011 have pushed prices higher in recent months. The Association also points to a drastically decreased number of foreclosure properties as a factor driving the inventory shortage and price escalation. REOs, or bank-owned properties, made up only 11 percent of the total statewide market for closed transactions last month, as compared to over 27 percent a year ago.

In San Diego County “distressed sales,” which include foreclosures and short sales, accounted for 13 percent of total sales, less than half the 28 percent observed a year ago. San Diego and other urban markets like Los Angeles and the Bay Area continue to fare better than inland markets such as Sacramento and Fresno, where more than half of all sales are still considered distressed.

The rising tide has proved a boon for many people who weren’t drastically underwater, however – 63 percent of all home sales in the state are now conducted by sellers with equity, compared to less than half of all sellers a year ago.