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Rob Dawg left this on CR:

This slow decline in the inventory is especially concerning with the large reported inventory and 8.0 months of supply in March – well above normal. – CR

“Inventory” c.2010 is not inventory c.2007. There are so many new considerations I’m not sure 8.0 months means what it used to mean.

• shadow inventory
• 2 minute MLS listings
• the return of pocket listings
• permanently on market second houses
• extended escrows for short sales
• double counting flips

There are surely more.

He also was the guy who said all previous assumptions don’t apply, which is more on the same theme – today’s market is unrecognizable when comparing to historical norms.

What are other curveballs we can add to the same list?

  • Realtors ignoring the rules/laws, and no enforcement anywhere.
  • Qualifying for a mortgage is tough, with down pmts required.
  • Fewer comps to help guide valuations.
  • Appraisals being done by people who are strangers to the area.
  • Sellers who are greatly motivated to NOT sell.
  • Defaulters lasting months or years with little threat of foreclosure.
  • Banks under no pressure to foreclose.
  • Flippers making six-figure profits (or more) regularly.
  • Government spending trillions with little obvious impact.
  • Unemployment/economy having little obvious impact on sales.
  • Millions of short sales with no rules/regulations/enforcement.
  • No big public protest.

For those of you who are repulsed by this list, I salute you.  If there is a big protest, let’s join in – I’ll be the guy in front, looking for a TV camera….

For those of you who are thinking about forging ahead with the search for a home to buy – in spite of the crazy, insane conditions, I empathize with you.  I promise to help you at least find a house that will last you a long time – hopefully forever, so you can quit thinking about it!

For the record, here are Sandicor’s detached-home listings in North SD County Coastal – the total amount of new listings taken in the period Jan 1 to Apr 22nd (though Sandicor takes out the wihdrawns from previous years, add 100-200), plus the number of solds:

Year Total Taken Closed/$psf
2005
1,648
881/$467
2006
2,116
773/$492
2007
1,885
745/$454
2008
1,869
542/$461
2009
1,792
452/$398
2010
1,780
639/$381

In the peak frenzy years we had very low inventory stoked with exotic financing – an alluring combination. Today we have a low inventory count combined with what seems to be lower pricing, which helps compensate the buyers for the tougher financing available. But today’s decision-making is complicated by a third component – frustration with interpreting the crazy conditions mentioned above. Buyers want to buy just so they can quit thinking about it, and move on with life.

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