What is going on with inventory?

[Mark Holmes]

So, since I’ve been house shopping and buying (in escrow on a short sale) since December I can’t help but notice that inventory has shrunk to just about nothing. And not just in central San Diego. Same thing in OC, apparently. Nice piece in the OC paper today about how foreclosures have dropped to 2007 levels:

http://www.ocregister.com/articles/weeks-345421-orange-sale.html

What’s going on here? Shouldn’t there a be huge backlog of NODs and foreclosures ready to come on the market?

What’s your take?

[briansd1]

Government and Federal Reserve real estate stability programs are working. Some of us might not like it, but that’s what the general public, the real estate and financial industries are demanding.

Only need-to-sell properties are listed and selling. Banks are holding off foreclosing and selling in order to stabilize prices.

People with equity who don’t really need to sell and can hold off are not “giving away” their properties. They are hoping for prices to recover to peak.

The reversion to mean will be drawn out and more easily observed as inflation adjusted real prices.

I see short sales in contingent/pending status for 180 days to 365 days or more. You know that the owners are not making mortgage payments. And the banks have not yet foreclosed. If the owners have tenants in their properties, I’m sure they are happy just collecting the “free” rents.

[sdduuuude]

I’m not sure I would say those programs are “working” (i.e. stabilizing the housing market).

I think I would say that people are expecting them to start working and are waiting for a better market to sell.

Simultaneously, those who want / need to sell are tired of waiting for a better market and giving in to lower offers.

This combined w/ a Jumbo limit of $545K that forces buyers to stay below $545K +

[SD Realtor]

Agreed with both of you kind of… I am not so sure the programs are “working” but that was not the real point of the programs. They were designed as yet another one of many measures to manipulate the market and provide pricing support. Individually these measures provide some support in accomplishing that goal. Bundled together they definitely accomplish the goal.

Note accomplishing the goal does not mean that the overall problem is resolved.

[The-Shoveler]

Starting in April I think, Fred&Fan are going to be selling bulk foreclosures to large corporations, who are obligated to rent them out for a period of time. This I think will almost completely kill the foreclosure flip and mom and pop landlords plans.

JMHO.

[briansd1]

[quote=sdduuuude]
This combined w/ a Jumbo limit of $545K that forces buyers to stay below $545K +
[/quote]

I’m sure the real estate industry, especially in CA, would like to raise that limit.

[Jazzman]

This is being discussed here

February 2012 Resale Data Rodeo

and here http://forums.redfin.com/t5/Los-Angeles/Is-there-a-shortage-of-houses-on-the-market/td-p/303807

It is a major problem in my view. In fact, it is so dire my wife and I took the decision a while back to leave California, which we are doing at the end of this month. I believe the problem is the shadow inventory which manifests itself in different forms. The best definition I’ve heard for it is all homes that would ordinarily be on the market. So not just REO’s, but those which are waiting for a recovery, maybe the move-up segment, and any other reason you would expect to see homes being listed but aren’t due to the economic situation, and housing market woes. It has characterized the market for some time, and is a common complaint not just among buyers, but also Realtors. It is an important message that I feel strongly needs to be out there. Good on you for bringing it up. Maybe someone is listening.

[Author]

Posts