“Despite having 9 NOD filings within a week in the 92127 zipcode, only two of these homes are on the MLS. This fits with what we are seeing with our foreclosure/pre-foreclosure tracking data as well as our inventory tracking data. In short, the distress is increasing, but the distressed owners are not listing.
Market psychology is a very important factor. Here we have 7 out of 9 distressed homeowners simply giving up and just letting the clock run its course, what does that say about the seller psychology? More impressively, of the 5 homes owned by REALTORS®, only 2 out of 5 are bothering with a listing. If even the cheerleaders are tossing away their pom poms, oh boy…”
So people are going to live free for a while then walk. The current psychology indicates it is utterly futile to list right now (why bother), so inventory is not giving a true snap shot of the distress. It makes you wonder if an area does see an uptick in activity then you will see these distressed properties go onto the MLS increasing supply and then ultimately depressing prices, rinse…repeat until the market eventually clears.
