The Numbers and What [I Think] They Mean

The total inventory of homes dropped from September of ‘08 to September ‘09 by 49% (from 20,793 to 10,547).

Obviously, people are buying houses at a much greater pace than last year. The biggest increase in purchases are in the Short Sale sector where closings are up 117% over last September (272 to 593). That emotionally brutal process is becoming streamlined. More sellers are opting for that option over foreclosure, while more buyers are willing to put up with the hassle of purchasing short sales as opposed to getting offer after offer rejected on bank-owned properties where 20 - 30 offers per property is not uncommon in the lower end of the price range. It’s looking a lot like it did in 2005 when we had a feeding frenzy for properties.

Foreclosure inventory, on the other hand is shrinking comparatively to short sales. While homes are still being foreclosed upon in record numbers, they are not being released into the market at anywhere near that pace. Obviously, the banks are attempting (quite reasonably) to limit the inventory (supply) to keep the prices up (demand being equal). It begs the question of how long that “inventory dam” can hold up with more homes going into the reservoir of homes than there are going out.

My guess is that after the $8,000 tax credit expires after November 30th (assuming it doesn’t get extended), we’ll see bank-owned homes being released a more brisk pace since the demand should drop off. I think prices will settle down again, at least, in that lower price range. Says me, anyway.

Kenny Shore, Realtor® · 702-339-9118 · LetsLookAtHouses.com