There has been noticeable sharp drop in the number of local homes for sale around here. We have more buyers than homes to buy. In an ordinary marketplace, the laws of supply and demand would force prices higher, but this is housing in 2012. Housing supply and financing availability is set by the government. Fannie Mae, Freddie Mac, and the HUD organizations trickle out the supply of foreclosures for sale, and are the only game in town for 30 year financing. So home prices are simply whatever the government says (or does). Home prices are still mostly below replacement cost, held down artificially, from what we can see.
Cailfornia's Capitol by Skip Murphy. Image completely unrelated to article
As of today, there are way less than a thousand homes for sale total in the Shasta MLS. There are just under two hundred sold every month lately. So roughly speaking, that’s a very low supply of less than 5 months worth. Many of our sales are foreclosures and short sales, a category we call distress sales. Here’s the latest numbers from website Redding Foreclosure Deal of the Day.
Jan 2 2012
134 bank-owned homes for sale
146 bank-owned homes pending sale
224 short-sale homes for sale
194 short-sale homes pending sale
3 HUD homes for sale
For most of 2010, the number of bank and government owned homes (REOs) was over 200 on any given day, and in 2009, it was often over 250. With a large portion of local sales coming from this inventory of bank and government owned foreclosed homes, the low numbers are having a real dampening effect on buyer choice. Good deals do trickle in, but are quickly snapped up, with multiple offers on the table.
We should be able to look back on 2012 shortly, as the sales data gets entered from the busy last week of 2011 (we closed 3 in just one day!). Stay tuned to see the trends reviewed here at Redding Homes Blog.