So I went searching for the story. As far as I can tell, I don't think inventory is shrinking because of increased sales. In fact, March sales, according to DataQuick were down for these zips around 9% compared to last year. Thus the only explanation left, seems to be that homes are not coming on the market due to discouraged owners/sellers who don't want to compete with bank owned homes. This also may explain the increasing proportion of distressed sales out there compared to "normal" ones. In other words, we have lost the spring bounce.
I do expect sales to start recovering this year, as 30-40% off peak is a substantial amount. Two people I know well have recently gone into escrow (my mom and our babysitter....our babysitter is a friend of the family who is a teacher, not a teenager, in case you were wondering). Don't forget that a 100% increase in 50k, which brings you up to 100k, only takes a 50% decrease to get back down to 50k. 30-40% is nothing to sneeze at. Of course the areas we are looking at haven't decreased nearly that much...sigh.
*For instance today I am trying find a good explanation for why total domestic aviation operations are down, but delays are up compared to previous years.
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I'll hazard an aviation guess - ticket prices are way up (fuel) but airlines cutting back flights to reduce losses, damn the delays anyway.
OK back to RE...
Looks like seasonal inventory bounce IS in effect, especially in zips that didn't have mass tracts of new homes and REOs to deal with. Inventory bounce is being offset by huge sales of REOs in Natomas, EG, RC, etc. that have been going into pending since January, took awhile to close.
We had a huge volume (relatively) of inventory overhang from 2007 AND builders have cut way back, cutting back the inventory fuel.
Housing Tracker II shows inventory might be below or equal to 2006 at this time (hard to read mid-month) - has been flat since January. Our regions inventory increase started a year before most, looks like it peaked a year before most also.
Those waiting for the next wave of REOS can see them in the short sale category - already accounted for mostly IMHO.
All I know is that my old search criteria keeps expanding and inventory is outpacing sales.
Last year I was lucky to see 30 listings in the spring then they balloned to 60. They dripped to the 50s in Jan-March but are back up to 69 now. And what does move sits in PS for 90 days or more. PSB seems to getting very common.
Things are moving but only if they are really really discounted. But then I wasn't looking for a big expensive house.
Regarding my day job - Even though total airport operations are down, they are actually up at the busy capacity constrained airports (hence the queuing delay).
Much of the drop in operations is due to fewer General Aviation and Military ops.
Very much like RE....location, location, location =)
The disconnect between inventory and sales happened in the early 90's, too. As prices decline more, the "optional" sellers just pull out of the market, leaving it for the "must" sellers, whether REO or homeowner. As you note, sales haven't picked up that much, but the number of "wish I could sell" folks has declined as they have given up. At some point as prices decline, the "must" sellers will approach 100% of the inventory available.
I also wonder, how many of last year's "wish I could sell" houses will be back on the market soon, as REOs?
Regarding whether or not sales will climb, I'd be curious as to what a "normal" sales rate is. It certainly isn't the blistering all time high pace we saw in recent years, so I wouldn't necessarily expect that "normal" would have things increase too much though I have no idea what normal is.
There's no reason to buy now. Prices are going lower and unemployment increases. Why would you buy now when the trend is going lower? Don't regret your decision and be another statistic next year as yet another repo.
Regarding aviation, a good friend of mine works for Southwest which is known as a popular and reliable airline. He's been sent home 3 out of 5 work days in the past several weeks due to slow demand.
The ZIP codes I track (BTW, we are moving this weekend) the inventory level is certainly not going down.
Builders cutting back on construction means very little for the tons of houses that are already built.
Way too many speculators buying up 'investment' properties still. By that I mean that they expect home prices to rise up to 2004 levels again.
And the number of sales will NOT be reached for sure. The prior #s were skewed by speculators. So even when 'normal' numbers come up, they will seem low in comparison to bubble #s.
don't bite on the dead cat bounce....we're a couple years away from rock bottom....hello 1999 prices...
Banks are holding a TON of unlisted "shadow" inventory. It would be mayhem if they unloaded everything they were holding right now.
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