Inventory Surge?…Not That We Can See

Westcoe Realtors, Riverside California…There was an article in the Riverside Press Enterprise last week in which 2-3 real estate agents were quoted as saying that their inventory of bank foreclosures had risen in December because the banks were now beginning to release some of their repossessed properties.  Well, we’d love to see that happen, but for now, the numbers just don’t bear that out.  Maybe for the few agents in the article, but for the entire Riverside area as a whole, it’s not happening yet.

 Below you will find the latest inventory statistics from the local MLS regarding the number of properties available for sale. (and yes, I know this will come out crooked when you read it…programming glitch, because it is straight when I type it!)

Month                    Properties for Sale           Month                     Properties for Sale

January, 2009                 2385                        July                                  1184

February                           2238                        August                             1100

March                                 2106                       September                      1056

April                                   1883                        October                            983

May                                    1646                        November                       997

June                                   1332                         December                       1050

Now, let’s look at this…and please note, the number of available properties for sale in January, 2010 was 1034.

First, there is no increase that I can see.  The inventory numbers for the year are off over 50%, and since October, there is less than 50 properties separating these 4 months.  If you really want to micromanage the data, then you can note that January 2010 saw a decrease from December…but for statistical purposes, it appears that while our inventory took some serious drops throughout the year, it seemingly stabilized a bit beginning in October/November.

Second, by many accounts, there are tens of thousands of unaccounted for bank repossessions in the Inland Empire area…so where are they?  You’ll get as many different answers to that question as there are people in the room, but we can tell where they aren’t….THEY AREN’T FOR SALE, THAT IS FOR SURE.  Theories abound, but the simple reality is that they are not being released for sale in the market…and trust me…they are not being held for loan modifications either.  Loan mods represent a very small part of our market.  Yes, there are some, but not many compared to all the properties in some stage of foreclosure.

Thirdly, we cannot emphasise enough that until banks get out of the home ownership business, our real estate market cannot equalize and begin the road back to recovery.  As long as the banks hoard their repos (for whatever reason), there are no “move-up” sellers to purchase the more expensive homes, appraisers remain extremely conservative because of all the unaccounted for repos that are somewhere (and therefore they will not let prices rise for fear a flood of repos are coming soon), this market will extend for a far longer period of time while we are forced to wait this out, and the massive demand of buyers that we now have will continue to remain incredibly frustrated at the lack of available homes to purchase…HOME PURCHASES THAT COULD GET US OUT OF THIS MESS.

So…while we beg, plead, and pray for our inventory to rise as the Press suggests, for now, that is only a wish, and not a reality.

Take care, and let us know if there is any issue you would like to see addressed in this blog.