Inventories Flat?

[HB Bear Too_IHB]

I've seen some anecdotal evidence that inventory levels of are relatively flat since the end of January this year. As examples I'll site the inventory graph on this site.

And the numbers found on Bubble Tracking. If you have a quick look at these data in particular, what you're going to see is that on Jan 30, 2008 and according to Redfin, there were 17,151 homes for sale in OC; on April 30 there were 17,358. A couple of hundred more homes in April than January a bit more than 1% which I would call essentially flat. So for the year, inventories are essentially flat.

Even if you don't consider the 1% increase to be "flat", I'd point out that in the same period in 2007, we saw inventories rise 28.5% rise from roughly 13,200 units to just under 17,000 units and that a rise in inventories as we enter Spring is typical. But, this year we don't seem to be having any seasonal run-up in inventory.

And, I'm sure you've already noticed the coincidence that we have roughly 17,000 homes for sale both now and one year ago as well, meaning of course that inventories in OC are flat on a year-on-year basis as well.

I have to say this is strongly counter-intuitive to me. I mean, we have only a trickle of homes being sold compared to last year and I would expect almost every other year on record, showing that demand is weak. On the other hand, we also have a glut of bank-owned, short-sale, foreclosure-avoidance properties on the market meaning that supply, at least for those segments of homes, is strong.

So I pose these questions to the group:

Doesn't weak demand and strong supply at least imply that inventories should be on the rise?

And if not that, then shouldn't we at least have our normal, seasonal run up of inventory?

Is it the case that a lack of "discretionary" home listings have lead to stable levels of inventory?

Any insight would welcome.

 

[freedomCM_IHB]

I only have specific data for Costa Mesa, but it is clear from those data that the year of last purchase is highly skewed. There is a big hole of last sale years from 2000 to 2003, while earlier and later listings are more highly represented. This suggests to me that those people who purchased their house before the run up of 2001 to present are still listing as they will have significant equity. Over half of the listings are 2004-2007 purchases, and these appear to all be either REOs or short sales.

I think that the stable inventory reflects people who are basically equity even on their houses at the current prices, who are still able to afford their mortgage payments, are staying put and not listing their houses for sale this year.

How long they will be able to hold out, I don't know. job transfers, retirements, etc will impinge at some point.

 

[Axiom_IHB]

Personally more specific data means a lot more to me than very general numbers ie: OC inventory as a whole.

I've been getting e-mail updates for over a year now on a specific list of criteria in a specific loacation in OC and I can tell you the number of available properties this week is the highest I've seen.

Also, I know realtors who are encouraging people not to list right now if they don't have to sell. Seems somewhat counter intuitive since normally they're all about recruiting as many buyers and sellers as possible. But not a bad ploy if the goal is to get inventory numbers looking better in an attempt to nudge fence sitters into the market.

Along those lines.... when pent up demand is brought up I think that needs to be balanced with all the folks who would like to sell, but are waiting for a magical market turn around in order to "get what their house is really worth; not gonna give it away you know."



FWIW I've seen a whole lot more "hold, do not show" than "closed sale" listings in the past year on my updates.

 

[freedomCM_IHB]

ok, you can see the data here for the houses i'm monitoring in CM:

year of last sale:

<2001 62

2001 = 7

2002 = 2

2003 = 9

2004 = 10

2005 = 36

2006 = 36

2007 = 7

as i said, almost all of the 2004+ listings are REO or SS.

 

[ipoplaya_IHB]

Irvine has the same amount of inventory as March 2007... That is not indicative of "weak demand and strong supply". I think it has been more along the lines of "weak, but increasing demand and weak supply".

 

[freedomCM_IHB]

is there the same bifurcation of "previous sale" dates in Irvine as in CM?

 

[HB Bear Too_IHB]

ok, you can see the data here for the houses i'm monitoring in CM:

year of last sale:

<2001 62

2001 = 7

2002 = 2

2003 = 9

2004 = 10

2005 = 36

2006 = 36

2007 = 7

as i said, almost all of the 2004+ listings are REO or SS.

That's interesting. It looks like at least the majority of homes in your sample are distresses. Depending on the proportion of homes in distress in the <2001, it could be the vast majority. Gives some credence to the idea that there are few undistressed homes on the market.

 

[HB Bear Too_IHB]

Irvine has the same amount of inventory as March 2007... That is not indicative of "weak demand and strong supply". I think it has been more along the lines of "weak, but increasing demand and weak supply".

I could agree with that.

 

[k.o._IHB]

Irvine has the same amount of inventory as March 2007... That is not indicative of "weak demand and strong supply". I think it has been more along the lines of "weak, but increasing demand and weak supply".

Ipo,

Is there any indication in your data that people have taken their houses off of MLS after they've been on for a few weeks? Or re-listing several times? I only keep data for a few condos in Irvine, and I haven't noticed that trend like I have in other cities (AV, MV, etc). But I would think that perhaps some people are still just "testing the water"?

 

[CalGal_IHB]

Or re-listing several times? I only keep data for a few condos in Irvine, and I haven’t noticed that trend like I have in other cities (AV, MV, etc).

I've been tracking quite a few houses for a few years now and some of them have been playing the "relisting" game. These relisted properties have to skew the numbers a bit.

 

[freedomCM_IHB]

That's interesting. It looks like at least the majority of homes in your sample are distresses. Depending on the proportion of homes in distress in the <2001, it could be the vast majority. Gives some credence to the idea that there are few undistressed homes on the market.

As far as I've been able to ascertain, very few of the pre-2001 houses for sale are in distress. I've only tagged 3 as having obvious problems (but have only hit the OCtax site and realtytrac for a few). The whole HELOC abuse thing didn't seem to set in to these long-time owners, who appear to still have equity.

I would say that ALL of the post 2003 sales are distressed, however.

 

[k.o._IHB]

Or re-listing several times? I only keep data for a few condos in Irvine, and I haven’t noticed that trend like I have in other cities (AV, MV, etc).

I've been tracking quite a few houses for a few years now and some of them have been playing the "relisting" game. These relisted properties have to skew the numbers a bit.

See, that's what I'm thinking, too. Take it off for a couple weeks and then list it again, so it seems fresh. Another thing I notice is that there are not as many open house signs up, either.