Inventory Trends Continue ... For Much Longer?

Now that we can all get back to our regular routine and stop fantasizing about hitting it big for $640 million, let's focus in on a bit of reality.  We are still in the midst of the prolonged dip in inventory and it continues to be a factor in this still undecided market.  Trolling through the most recent stats and figures this morning over a hot cup of fresh brew, I found that San Clemente has actually lost even more ground in overall inventory since our last post back on March 16th, San Clemente is down from 231 active listings to just  these 224.

 In looking at the chart above, we can see that with the exception of January,  the number of homes sold has outpaced the amount of new homes coming to market, a trend appearing to start in October 2011.

Below, we see that Dana Point has remained relatively well balanced when compared to San Clemente with a total of 181 Active listings, not much change from the 179 for sale back on March 16th.

Laguna Beach though seems to be well out front in the available inventory with these 241 homes for sale, considering the population differences, there are plenty of choices.  Just bring your checkbook, because the average list price is $4,072,601.  It is a bit skewed though, 25 of the 241 for sale are listed at $10,000,000 or above.

So when does the market start to resupply towards a more balanced real estate outlook? The answer may lie in the data relating to the fabled "Shadow Inventory".   This rumored cache of real estate gold, is said to be sitting at 1.6 million units, nationally, down from last years number of 1.8 millon.  It is further reported by Justin Hilley, of HousingWire.com ®, that data pulled from Core Logic®,  estimates that "of the 1.6 million national units, Florida, Illinois and California account for roughly a third or nearly 528,000 homes".   Does this mean that we are due a flood of homes in the next 24 months that will contribute to yet another economy crushing decline in the housing sector.  It is unlikely, although I would expect we will see a moderate stream of homes released starting in the next few months, this will allow lenders to ease their already battered balance sheets, one step at a time.  This, coupled up with the "normal" Spring listing boost should satisfy the  continued demand for homes and help "balance" things back towards a buyers market.

Once we get past the upcoming tax deadline, look for a noticeable increase in the second half of April.  Now that interest rates have again retreated after a week of instability, we should have a decent run of stable rates, you could see ranges from just under the 4% threshold to 4.5% or just above.

As always, if you are thinking of taking advantage of this historically volatile market in the next one to two years, NOW is the time to get in the game!