This week several stories came across my desk regarding the severe shortage of available homes for sale. What caught my eye was that these were not local stories. Markets across the country are experiencing the lowest available inventory they’ve seen in decades…or ever, in some cases. Here are a few of this week’s stories regarding inventory:
- Shortage of homes for sale creates fierce competition – Los Angeles Times – June 10, 2012
- Why So Few Homes Are on the Market – Bloomberg Businessweek – June 11, 2012
- Inventory of For-Sale Homes Falls 20% From Year Ago – Daily Real Estate News – June 13, 2012
From the Inventory of For-Sale Homes Falls 20% From Year Ago story…
From May 2011 to May of this year, the following metro areas have posted the highest drops in the country with their housing inventories, with inventories falling 35 percent or more in the last year. Those metros are:
1. Oakland, Calif.: -56.60%
2. Fresno, Calif.: -48.76%
3. Bakersfield, Calif.: -48.59%
4. Phoenix-Mesa, Ariz.: -44.71%
5. Seattle-Bellevue-Everett, Wash.: -42.65%
6. San Jose, Calif.: -40.80%
7. Tampa-St. Petersburg-Clearwater, Fla.: –39.76%
8. Stockton-Lodi, Calif.: -39.25%
9. Atlanta: -39.19%
10. San Francisco: -38.90%
11. Riverside-San Bernardino, Calif.: -37.43%
12. Sacramento: -35.92%
What’s interesting to note is that, other than in the state of Nevada, none of these other markets have an AB284 to point to. It makes me wonder, would our market still be experiencing a shortage of available inventory even without AB284?
Incidentally, if you’re curious, inventory in the Reno-Sparks metro area is down 60.2% from May 2011 to May of this year. Not sure why we didn’t make the above list.
Sully
Could be that people have noticed the piddling dividend they get from the bank every month and decided that real estate has more to offer! 🙂
BTW, California is supposed to be enacting a similar version of AB284. Since 80% of your list is in CA, then I would suspect inventory will drop off completely.
Sully
Actually, it was 66% not 80%.
Matthew
AB284 is an exacerbation of a federally-created problem.
Banks are partially exempted from mark-to-market accounting of their mortgage assets.
The result is that banks with garbage mortgage assets are allowed to leave them on their books as pre-crash-valued assets. This little gimmick is what we did to make many large banks appear solvent and to avoid collateral and margin calls.
It should surprise nobody that there is no hurry to release foreclosed assets. Once the properties sell the assets are then marked down on the books…. and book values are what keeps this facade up, for now.
Guy Johnson
And one more piece from this afternoon: California for-sale inventory at 2005 levels
tyler durden
ZIRP is accomplishing its purpose
Sully
Yeah tyler, zirp is working, but for how long? I’ve noticed rentals on craiglists have blossomed big time. In 2009, when I was forced to make a choice to find a new rental or buy something temporary – craiglist had a handful of houses on it. Now there must be a thousand listed. So what now? Everyone gonna rent? I doubt it. Many of these investment properties will sit and sit and sit. Then they become distressed sales – kinda like deja vue all over again! 🙂
tyler durden
i didn’t say that zirp was a good policy….jury still out on that
Carney
The reason that Reno did not make the list is that the national media does not Reno exists. The national media thinks the only place noteworthy of reporting on in Nevada is Las Vegas, and many think Reno is just a section of LV. This is why Reno never gets mentioned when discussing cities that had huge bubbles. Reno had an enormous bubble, certainly one of the biggest anywhere in the USA, but it was always LV that got the press.
Dirtbagger
Carney – the reason Reno gets skipped by the media is it is a relatively small population center. It ranks at #115 in the MSA with a population of 430K. On the other hand, Vegas ranks #30 in the MSA with a population or nearly 2000K.
Reno does seem to get a fair amount of media attention for it’s size, but unfortunately in the last year or so it has all been pretty negative (fires, foreclosures, underwater homeowners, air race crashes, IHOP killings, etc).
Don
Reno is mentioned over the media and websites i.e.Forbes.com and many others all the time. We are in the top 100 metro areas regarding housing foreclosures, unemployment rate, etc. We did NOT make the list as it indicated only those cities with 35% or greater loss of inventory year over year. Reno was listed at 26.9% so obviously we were not listed.Currently as of 6/18/12 m/m we had an increase of inventory of 2.6% and y/y loss of 25.6%. Median asking price has increased 4.5% m/m and 12.7% y/y. This last month I have received foreclosure addresses from Trulia at a rate of 5-15 per day for the Reno area, so foreclosures have ramped up considerably lately. Also, Forbes,Reuters, Bankrayte.com list Nevada as the #3 state for foreclosures currently and northern Nevada with the most in the state. This is all in black & white for all to see. Guy especially should be aware of this info.