OC Home Inventory at 7-Month Low: Is This a Sign of Recovery?

In case you didn’t know, I always love me some Jon Lansner. He is one of my favorite Register bloggers, and he always does a great job in keeping up with our wild & crazy real estate market here. But anyways, Lansner has some interesting news today.

It looks like OC home inventory is at a 7-month low. So what does this mean? Increased sales? A possible turnaround? Happy days are here again?

Not so fast.

Market watcher Steve Thomas at Re/Max Real Estate Services in Aliso Viejo every two weeks calculates “market time,” a benchmark of how many months it theoretically takes to sell all the inventory in the local MLS for-sale listings at the current pace of pending deals being made. By this Thomas logic, it would take 9.73 months for buyers to gobble up all homes listed for sale last Thursday at the current pace of deals vs. 12.51 months two weeks earlier and vs. 4.87 months a year ago. Last Thursday’s “market time” is the lowest since late July. A key reason: the latest count deals in escrow of 1,568 is down 57% vs. Jan. 19. But please note: By Thomas’s math, in the past two weeks the number of distressed properties (foreclosure and short sale) listed for sale is up 296, or +7.1%, while the inventory of non-distressed listings fell 282, or -2.5%.

Hmmm, so it looks like the internals aren’t as pretty here. Inventory for distressed properties is still rising. So does this spell doom? Are we in for more real estate gloom?

What are you thinking about the current state of real estate? Are you seeing fewer homes for sale? Or just more foreclosed properties for sale? Is this the beginning of a real bear market for OC homes, or the first signs of a returning bull market?

Tell me what you think.

  4 comments for “OC Home Inventory at 7-Month Low: Is This a Sign of Recovery?

  1. February 11, 2008 at 10:33 am

    Well, I check zillow to torture myself on my houses value. Real Estate agents have told me it’s bunk, but if it’s not, my house has lost almost 20% of it’s value since I bought it in late 2006. Now, since I plan to live there a long time, it’s not the end of the world, but it most certainly isn’t the most comfortable feeling in the world.

  2. Steven Greenhut
    February 11, 2008 at 12:12 pm

    Inventories are low because people are not selling now given the dismal state of the industry. Only those who have to sell — i.e., moving out of town — are listing their homes. Prices in my neighborhood are down significantly, about 20 percent off their peak (based on informal observations). Price slashing is endemic everywhere.

  3. Andrew Davey
    February 11, 2008 at 12:39 pm

    Heather-

    Damn! You’ve got stronger guts than I do. I’m afraid to go anywhere near zillow. It’s painful enough for me to walk around the neighborhood and see the “House for Sale” flyers with multiple slashes on the older, higher prices. ;-)

    Steven-

    Good point. Why should folks (other than those who must sell due to relocation) torture themselves by putting their houses on market now? That’s good reasoning.

    Inventories may be declining (overall) just because fewer people want to sell in this market. Sellers can no longer ask for top dollar, and buyers are more empowered to bargain down (since there are also fewer folks wanting to buy now). And if all of this is true, than there isn’t much reason for us to feel giddy about these new inventory numbers.

  4. cook
    February 11, 2008 at 2:10 pm

    I think house prices are still in the shallow in of the pool. And still (prices) are walking towards the deep in. About the only thing that will stop the drop is a very very weak dollar.

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