At long last, below is the historical sales number and price data from two separate sources. Astute observers may notice that the name of the second data source name has been omitted as the actual source of the data has changed. Note that all four charts have the same scale for sales number and price for easy comparison between the markets and data sources.
Hard to tell if we are on a elongated spring ledge or if the market is starting to level itself out a bit. Only time will tell. Last I checked pending sales were at one of the highest levels I have ever seen. Now that more homes meet my criteria, this is much more indicative of the broader market.
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The tactic by most of the banks in both EDH and Folsom is a $5k to $10k drop per week until they find a buyer. To note though, the starting prices have been lower than previously.
Some banks come in with a lower price and expect multiple bids, this is however much rarer.
I don't see how prices can stabilize, even discounting the macro economic issues, when on my street there are three (3) known REOs not on the market and at least two (2) others that are in limbo (mine included) and not part of the stats. That is out of about 20 houses.
Friends and family in EDH and Folsom also report similar situations on their streets.
The banks have been very good at holding the line on supply. Collusion ... possibly, in their best interests... definitely.
You got to give the banks some credit in that they have done a pretty good job of restricting supply. Even with that the prices continue to fall.
But this could be a case of prisoners dilemma, one break and it is over. AND the recovery can begin.
I don't think the banks are working together, they aren't that smart.
I think a lot of REOs were held back because of the governments plan to buy them from the banks (probably at 100% value). In the end the TARP was used differently.
Then you had moritorium after moritorium.
And add to that, the banks can't even handle what they have now.
But I do agree that all it will take is one large bank to capitulate and dump their inventory at whatever they can get to start the ball rolling.
We need capitulation before we get to the bottom and we need to get to a firm bottom before things will start to get better.
But it is hard to tell what that shadow inventory is. 20% in your example. I read on one of these blogs that there is a 5 year supply not even listed (and that is 5 years if nobody else trys to sell a home).
The median price in EDH over the last couple months looks oddly consistent to me. I wonder why?
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