A couple of posts back there were commenters mentioning their frustration, with some buying a house to end the uncertainty and move on with life.
Our reader named “Waiting to feel the magic”, who is closing escrow soon, said, “Effectively there’s almost no inventory”.
The recent statistics reflect the same. There were 2,895 detached and attached SD listings marked pending in July (as of today) and there are 12,038 active listings. – or generally about one out of four listings that is finding a buyer currently.
But after removing the fallouts and the over-zealous buyers, we can probably guess that only 1,000 or so of the 2,895 pendings were decent-quality buys that’ll close. Considering that there are 2,264 listings marked as sold in July (S/AI=19%), plus that the bubbleinfo buyer is fairly picky, we can conclude:
Less than 10% of the active listings are worth considering.
After paring those down based on location and price, there are roughly 1-3 houses per month for buyers to consider seriously. Add the fatigue and discouragement that comes from 90+ percent of the homes being a waste of time, and you can’t blame buyers for wanting to get it over with – most have been looking for months or years!
Will it get better in the coming months? Will there be more quality inventory to consider?
If you’re looking for a SFR in North SD County Coastal, it doesn’t look like it.
Let’s examine the current foreclosure rolls:
|Y-T-D||SD Co. ’09/’10||NSDCC ’09/’10|
Though the trustee sales have increased by 51% Y-O-Y in North SD County Coastal, they aren’t flooding the market, and overall in San Diego County there are fewer being foreclosed this year.
|NSDCC||As of 8/1/10|
The cancellations are a curious bunch. A review of the 62 cancellations in May, 2010 found that NONE of them have made it back onto the NOD or NOTS lists.
It looks like the cancellations are being caused by loan mods or short sales (unless servicers are just letting borrowers off the hook altogether) so it’s likely that the properties won’t be coming back to market in the short-term. The servicers will be deliberate in their review of those in the pipeline, and auction off 20-40 every month in North SD County Coastal. There were 193 closed MLS sales in July – we can handle 20-40 REO listings per month.
What are the prospects for additional inventory?
1. Over-encumbered sellers? They don’t have equity, don’t care, and are working the free-rent program. You might see them raise their prices.
2. Equity-sellers? They don’t have to sell, and they aren’t going to give it away.
3. Loan servicers increasing foreclosures? No chance, program is working great as-is.
4. MERS debacle? It’ll likely be a drawn-out legal battle, and won’t help home-lookers over the next 6-12 months. If anything it’ll probably slow down foreclosures/trustee sales.
5. Unforeseen event? Those usually freeze the market, not loosen it up.
Homelookers – expect more of the same for the rest of the year, but keep looking – there should be less competition over the next few months, than in early 2011. It only takes one!