Fewer Homes For Sale, Inventories Fall Sharply
Published August 4, 2011 | 
Daily Real Estate News | Thursday, August 04, 2011
High inventories of homes for sale have plagued many markets, but in a recent analysis of metro areas, inventories were found to be shrinking sharply during the second quarter, The Wall Street Journal reports.
About 2.34 million homes were listed for sale on the multiple-listing service by the end of June, the lowest level for that time of year since at least 2007, according to Realtor.com. What’s more, some inventory levels even reached their lowest levels since the housing crisis began five years ago, which has prompted some markets to even say their facing a shortage of homes on the market.
While a drop in inventories can often signal more demand — and ultimately a boost to home prices — some analysts aren’t so sure this signals a complete turnaround for the real estate market quite yet.
“While sales are picking up in some cities, analysts say the sharp decline in inventory also reflects the slow pace at which banks are processing foreclosures,” The Wall Street Journal reports. (The number of homes in foreclosure — a backlog of 2.1 million — is near a high.) Also, some sellers are taking their homes off the market due to low offers and waiting until they put it back on the market.
In its analysis, The Wall Street Journal found that of the 28 major metro areas evaluated inventory levels had dropped in all 28 — except for three. What’s more, they found that inventories had dropped by double digits in 16 of those markets during the second quarter when compared to a year ago. For example, inventories dropped in Miami by 43 percent from a year ago; 30 percent in Washington, D.C.; and more than 20 percent in cities like Charlotte, N.C., Seattle, and San Francisco.
“We’re in a shortage situation,” Brett Barry, a real estate professional in Phoenix, told The Wall Street Journal. Phoenix has a four-month supply of homes listed for sale at its current pace. “It’s a very artificial, ‘Twilight Zone’ kind of feeling, because we know there’s a lot of homes out there.”
Source: “Home Listings Fall But Woes Persist,” The Wall Street Journal (Aug. 3, 2011)
Read more:
How Much ‘Shadow Inventory’ Looms?
What’s up with Foreclosures?
Published May 19, 2011 | Will there be more foreclosures? Is the housing market headed for a double dip? These are questions that we hear all the time. The housing market certainly hasn’t picked up like all the experts said it would, but there is good news!
John E. Silvia, the chief economist for Wells Fargo, recently gave a presentation where he stated that Denver will not see a double-dip in values as some people have been predicting. He said that there was only a 0.6% drop in Denver housing prices from the fourth quarter of 2010 from the fourth quarter of 2009. He went on to say that was especially good about Denver is that people are still moving here and that there are jobs available.
Silvia also reported that only 19.8% of homeowners in Colorado are underwater compared to Nevada at 65.4% and only 2.7% of homeowners are 90 days or more delinquent in the mortgage compared to the national average of 3.3%.
There was also a report from the state of Colorado Division of Housing that foreclosures in Colorado have fallen to their lowest levels since the third quarter of 2008 and have fallen nearly 35 percent below 2009′s third-quarter total when filings peaked at more than 12,000. New foreclosure filings fell to 8,115 in Colorado during 2011′s first quarter, falling 27 percent from 2010′s first-quarter total of 11,136.
There is also talk of a “Shadow Market” which means some people think the banks are holding on to foreclosed properties before they list them for sale and that they have a large surplus that will hurt the market when they finally do go on the market. We don’t know for sure how many properties will hit the market and when. We do know that the banks have no intention of flooding the market and lowering values. They want to get as much as they can too from the properties that they now own. Banks are also starting to fix up properties with new paint and carpet and maybe even kitchens and bathrooms so they can increase their asking price and help market values to increase.
So what does all this mean for the average consumer? Values are holding steady. If you are a homeowner, hang in there. Values will likely go up, but at a more conservative rate than they did in the 1990s. If you are interested in buying a home, now is the time to buy before prices go up and while interest rates are still low.
Call us anytime for information on how the market is affecting you directly and how you can benefit from it.
By: Rachel Dammann – Metro Brokers – Ford & Associates, Inc.
Posted in Real Estate | 
Denver Housing Market, double dip, Foreclosures, Real Estate, Shadow Market | 
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