3 Responses to “Housing Inventory Drops Again - The Market Continues To Improve”

1. C. Rosenberg on June 10th, 2009 8:53 pm

   Hey Chris,
   Respectfully disagree.

   Just like the stock market is made up of individual stocks, the RE market is likewise made up of individual markets. and while the rest of the country X-Florida,Nevada,Arizona,& California may be doing a little better, I would argue that we are only at the tip of the iceberg in those four very crucial states….the reasons are manifold but the bottom line is “who is going to buy these homes”….the unemployment #’s keep worsening, the move up buyer is locked into their home because no retail home sales are going on in these states…only distressed sales, and investors are severely restricted from more than 4 or 10 (depending if you can find a program) of these homes. Banks are becoming psychotic will appraisals and review appraisals…. Here in Socal we have probably 36 months of shadow inventory waiting to be released…thhe banks think they are going to get a better deal from Obama……….I wish I could be more sanguine like you….Regards

2. Chris Anderson, Ph.D on June 11th, 2009 5:28 am

   Understand and agree with your stock analogy and that some market are still going to get hammered further. I don’t necessarily agree on the Florida, AZ, Nevada, CA comment although I have the least data in California right now. In Florida, we are definitely starting to work through some of the inventory but partly because it is getting dumped cheaply by the banks…… for lower dollar stuff, the rental returns are outstanding so they are getting absorbed quickly.

   However, just like your stocks, I would argue that even within a city, you also have various submarkets and different real estate products. So in my area of Destin Florida, we are starting to see a rebound in housing……. however, very high end condo’s on the beach are getting hammered and will continue to do so in a major way.

   I really appreciate your comments but please don’t take what we are saying is that every real estate product, in every location, is getting better….. we are simply showing that in portions of the country, for the right kind of product, things are improving……. and after the real estate market that we have been in, that is truly good news IMO.

3. Art House on June 27th, 2009 9:05 pm

   As a person affected by the Florida market, I can say that both of you are right and wrong in small ways. The Florida market is turning and I do think the bottom has been hit and or nearly so. Major institutional buyers have cleaned up buying condo and distressed new stuff for 40% on the dollar. They have placed them back on the market at a 15% - 20% markup and are moving them fast. What is happening is these homes are either placed back on the market at the realistic market rates and setting the playing field for the houses around them as far as price point is concerned. Then the rental market is screaming with profits for rental investors. Example: a $325,000 house 12 months ago went for $139,000 - 30 yr fixed at 5% +/- = $840 a month and bringing $1,200 rent and getting it all day long. Does not matter that the house is rental. It sold, it is off the market and rented. It is a part of the absorption. I give Florida 12 months to be back to normal. - Then take Midcoast Maine. Never got hurt. RE appraised higher this year than last. It may not be great but it is turning. The problem with CA is that nobody wants to move there with all of the debt, taxes and Gov. problems. No one business person with a pulse or an IQ above freezing will open a business in CA - so the exodus of business, jobs etc is not good for CA - So, you cannot compare the problems of that State with other areas. Sorry for the ramble buy thought I’d contribute anyway.
   Art House

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