Here is a chart showing housing inventory levels, sales, and REO inventory levels. You can clearly see that the number of REOs for sale begins to drop off in January of 2009….This is the result of foreclosure moratoria that began in the fall.
5/1/2009 | MLS Active | MLS Sold Last Month | Months Inventory |
Alameda County | 3468 | 998 | 3.47 |
Contra Costa County | 3869 | 1292 | 2.99 |
Alamo | 137 | 7 | 19.57 |
Antioch | 322 | 222 | 1.45 |
Berkeley | 91 | 49 | 1.86 |
Blackhawk | 80 | 2 | 40.00 |
Brentwood | 214 | 106 | 2.02 |
Castro Valley | 138 | 36 | 3.83 |
Clayton | 52 | 12 | 4.33 |
Concord | 306 | 139 | 2.20 |
Danville | 240 | 26 | 9.23 |
Diablo | 19 | 0 | 0 |
Discovery Bay | 92 | 24 | 3.83 |
Dublin | 112 | 36 | 3.11 |
El Cerrito | 30 | 17 | 1.76 |
El Sobrante | 35 | 7 | 5.00 |
Emeryville | 52 | 7 | 7.43 |
Fremont | 462 | 109 | 4.24 |
Hayward | 431 | 149 | 2.89 |
Hercules | 88 | 28 | 3.14 |
Lafayette | 123 | 12 | 10.25 |
Livermore | 265 | 72 | 3.68 |
Martinez | 151 | 32 | 4.72 |
Moraga | 60 | 7 | 8.57 |
Newark | 89 | 35 | 2.54 |
Oakland | 970 | 275 | 3.53 |
Oakley | 166 | 57 | 2.91 |
Orinda | 86 | 10 | 8.60 |
Piedmont | 34 | 6 | 5.67 |
Pinole | 28 | 16 | 1.75 |
Pittsburg | 215 | 113 | 1.90 |
Pleasant Hill | 87 | 14 | 6.21 |
Pleasanton | 271 | 37 | 7.32 |
Richmond | 418 | 172 | 2.43 |
Rodeo | 23 | 12 | 1.92 |
Rossmoor | 154 | 27 | 5.70 |
San Leandro | 175 | 67 | 2.61 |
San Pablo | 115 | 53 | 2.17 |
San Ramon | 267 | 68 | 3.93 |
Union City | 169 | 49 | 3.45 |
Walnut Creek | 254 | 53 | 4.79 |
In high-end communities, the spread between the number of homes for sale and the number that are actually selling continues to widen. The more distorted this number becomes, the faster home values will drop.
And, though it may seem like the REO numbers are small, the trend is that they are growing. Six months from now, I would expect to see 100 or more REOs for sale in these areas.
In more-affordable Bay Area communities, prices have fallen 50-60% or more and the market has been dominated by foreclosures. Today, ratio between what is for sale and what is selling is downright bullish. These areas have once-again become “Seller’s Markets” with most decent listings receiving multiple offers. Prices are still falling, but much more slowly than before.
The challenge lies in the trend-line of REO property for sale. The drop-off that began in January was artificially-induced by the government. How high will those red bars get over the next 6 months, now that the foreclosure machines have been turned back on?
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