Latest MLS Stats for Sales in Riverside

Westcoe Realtors, Riverside California…In association with the latest MLS inventory statistics reported in this blog last week, some of our regular viewers wanted to know about sales in our area.  Specifically, since the inventory is down, are the sales down as significantly?  Good question…and here’s your answer-NOT YET…but it could be coming.

First, the numbers.  The sale pendings (a sale pending is when a property sells and enters escrow.  Closed escrows are important, but they generally lag about 45-60 days behind the sale pendings.  Therefore, sale pendings are a better indication of what is happening right now) for the month of June were 519 in the Riverside area.  This means that 519 homes entered escrow during the month of June.  This compares favorably with the previous month of May, in which the sale pendings were 554.  In fact, for the year 2009, the sale pending numbers are as follows:

January          535                    April            557

February        487                    May             554

March             577                     June             519

As you can see, there is a little fluctuation for the year, but basically the sale pendings have been hanging tough so far this year.  As we have said many times before, the demand for housing is so strong in our area, that the number of “sales” has remained fairly steady.

However, my answer above was “NOT YET”, so let me explain what could happen if we (actually, the government) is not careful with the multitude of helpful changes that come at us almost daily. 

In a normal market (one without thousands of repos), if the inventory was dropping this fast, this would precipitate housing prices beginning to rise.  Simple economics at work here….big demand, little supply, and that is a recipe for housing prices going up.  However, this is not a normal market.  What we have now is a market in which the government and the appraisal requirements are doing everything they can to keep prices from rising.  Yes Toto,  our market is being stifled by some of the very people in charge of making it better.  I do not feel that is their intent, but as many of you know, sometimes the government solves one problem and creates 5 others…and that is what is happening here.

The net result is that with so many of the foreclosures being held back from the market by government moratoriums in effect at this moment, we could reach a point were sale pendings begin to drop simply as a result of the massively reduced inventory available for buyers to purchase.  In essence, if there is nothing to buy, there is nothing to go “sale pending.”  This has not happened yet, but if our inventory gets any lower, it surely will. 

What happens if you go to the store to buy milk, and there is none there?  Simple…we all go without milk until the cows begin to cooperate.  Far be it for me to equate our government with some cows, but the bottom line here is that our housing inventory is only going to begin to rebound one of two ways:  For “normal” sellers (those with equity) to come back into the market place (which will only happen when housing prices begin to rise), or FOR ALL THE REPOS THAT ARE IN THE PIPELINE TO BE RELEASED AND FLOW THROUGH THE MARKETPLACE.  The repos have to sell first, then the real sellers can return to the market…which makes any artificial impediment this “repo-flow” incredibly frustrating…especially when the impediment is our own government.  But…no one checks with us on this stuff, so we will continue to make as much lemonade as we can from the lemons being tossed our way.  Eventually, we will get where we need to go, but it would be so much easier if our government would actually help instead of hamper.  What can I say?

Take care, and let us know if there is any questions you need answered here.