Last week the real estate search website, Zillow, added new functionality that enables users to search for, and find information on, 1.2 million pre-foreclosure and foreclosed properties. This is a free service from Zillow, and according to Zillow’s press release:
These homes are not yet listed for sale and can’t be found on any Multiple Listing Service (MLS), nor are they freely available on other real estate sites. For the first time, home shoppers are able to see the entire scope of housing inventory in their area, both pre-market and for-sale, side by side.
It’s that last sentence that I believe will be of particular interest to many readers of this blog. How many times has the question of “how much shadow inventory exists?” been asked and speculated upon?
Well, now with Zillow’s new pre-market inventory search feature, we have a tool at out disposal that provides additional data for our analysis. Again, from the Zillow press release:
Zillow’s introduction of pre-market inventory gives buyers a leg up by enabling them to see not only homes that are currently listed for sale, but homes that will soon be listed for sale.
Additionally, similiar to it’s Zestimate, Zillow will provide an estimate of the sale price of the home if sold as a foreclosure.
So, what is the current pre-market inventory for Reno and Sparks according to Zillow?
1 Zillow defines “Foreclosed” as: These properties are owned by a bank or a lender who took ownership through foreclosure proceedings. They may soon be listed for sale.
2 Zillow defines “Pre-Foreclosure Homes” as: These properties are currently in default (i.e., the borrower has not made the required mortgage payments) and are likely to be sold at a foreclosure auction.
According to Zillow, the number of homes comprising what Zillow refers to as “pre-market inventory” in the Reno and Sparks market, currently stands at 1,096 properties.
To put that number into perspective with the local market’s currently listed inventory, performing a search on all available house and condo listings in MLS Area 100 (All Reno/Sparks) yields 846 properties for sale. Last month (September) 543 houses and condos, listed on the MLS, sold in Reno and Sparks.
Regular readers of this blog know that the local market’s inventory level has been at less than a two-month’s supply for most of this year – placing the area’s housing market into what is described as a “Seller’s Market”. If all of the “pre-market inventory”, as indicated by Zillow, were to enter the market today, that would bring our total available for-sale inventory to 1,942 properties. Given the current rate of sales (over 500 units a month), this new total would approximate a four-month-supply of inventory – thereby placing the local housing market closer to a “Balanced Market”.