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A new report out yesterday (September 23) from the California Association of Realtors trade group sends mixed messages about the strength of the real estate market going forward, following a jump in average mortgage rates of nearly one percent since June and one of the highest housing price spikes in the country.

On the upside, the Realtors confirm information released by an independent firm last week that show “distressed” sales including foreclosures and short sales continue to make up a shrinking portion of the market, though Realtors says the proportion of such sales as compared to total volume is even lower (18 percent statewide, but only five percent in San Diego County) than PropertyRadar (formerly ForeclosureRadar, which pegs the share at 24 percent).

Rising values deserve a large share of the credit for the decline, as many more owners are able to escape underwater mortgages without negotiating a discounted payoff to their lenders.

The portion of the Realtors report relating to pending home sales, however, points to a new downturn in the making. With August sales numbers already down, reflecting a retreat by buyers following June’s sudden increase in interest rates, the number of properties receiving offers fell by five percent as compared to July, leading to a slight increase in overall inventory.

Still, the housing supply remains historically tight, with available homes representing 3.1 months’ worth of demand. A six-month supply is considered to represent a stable market, with less supply indicating excess demand and more supply leading to a glut of available property.

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