Two thoughts worth exploring:
1. Is there any evidence of the foreclosure flood hitting the MLS yet?
2. How are regular sellers faring, compared to REO listings?
Currently the new REO listings are about 20% of the total new listings coming on the MLS. Last month there were 855 REOs sold, or 32% of the 2,659 closed sales.
So the majority of sales are non-REOs today, but as more enter the market, buyers will gravitate towards them because of the notion they are giveaway-priced just because they are bank deals.
SD County New Total Listings, and Number of Them Already Marked Pending:
|7-Day Period||All REOs Listed/# PEND||Effective %||Non-REOs Listed/# PEND||Effective %||7/31-8/6|
The 602 REO pendings over the last five weeks is only 28% of the total new pendings, but the banks are more effective with their pricing (62% vs. 37%). With REO listings expected to increase dramatically, and regular sellers cancelling their listings for the holidays, don’t be surprised if we see the number of REO sales increase to 50% to 60% of all sales by the end of the year.
Once the REOs make up the bulk of the sales, it will be very hard for regular sellers to compete – the buyers want to steal one from the bank! Look for 2010 to be the year of the Bank Deals!