Yes, I think the official stats are hiding all kinds of things. In this market, one has to get out there and actually be in the areas, make offers, follow transactions, etc…to get at the truth. It’s clearly getting strong downward pressure, but the activity level is a bit counter-intuitive. And that always causes me to be suspicious. I suspect that a lot of the $300k and under volume is speculative. As in investors are buying and renting them out. If this is the case, it will dry up as they max-out their ability to get money. The unemployment rate is just too high for me to believe that most sales volume is organic in nature. I could be wrong, but I’ve done a lot of historical analysis on the CA RE market over the years.

What’s happening in the $450K and above market makes complete sense to me at this time, though. This inventory has yet to get big, nor has it seen an increase in sale volume. Until the default-train hits this price level of the market, only forced circumstances should be putting inventory on the market. But if the current data on upside down Alt A and prime loans being in default is at all accurate… that train should be arriving somewhere around late summer.