The active inventory will not budge. In the past two weeks, it has increased by 25 homes and now totals 3,208. It has been bouncing around the 3,200 market for the first few months of 2013. Since tracking the market nine years ago, these levels are drastically less than the prior record levels established in March of 2005 at 4,912. To say that the current active inventory is low or anemic is an understatement. It is almost impossible to convey just how ridiculously low the levels are for comparison purposes. The inventory is simply unprecedented and does not show any signs of letting up.
Last year at this time, there were 3,407 additional homes on the market and they were flying off the market. With buyers on the sidelines waiting for new inventory to hit the market, pent up demand is astronomical. If there were an additional 3,400 homes on the market today, they would sell almost overnight.
The real issue is that the housing market is in transition across Southern California and across the United States. Distressed homes have faded as the market recovers and more equity sellers place their homes on the market. Thus far in 2013, there have been 1,094 short sales listed for sale thus far in 2013, down from 2,838 during the same timeframe last year; that is off by 1,744. Similarly, there have been 334 foreclosures listed for sale so far this year, down from 1,095 last year, a 761 home difference. The only increase has been in equity sellers. There have been 7,800 homeowners with equity in their homes opt to enter the fray thus far this year compared to 6,604 in 2012. There just have not been enough equity sellers to overcome the loss in distressed listings this year. Overall, there have been 12% fewer homes placed on the market in 2013 compared to 2012.
Demand: With not enough new inventory, demand, as measured by pending sales, dropped by 2%
In the past two weeks, demand, the number of new pending sales over the past month, decreased by a negligible 69 homes, and now totals 2,811. Compared to last year at this time, there are 1,029 fewer pending sales today. Until more homeowners realize how much homes have appreciated and are more apt to sell, demand will remain muted compared to last year. Distressed homes have faded and equity sellers have been slow to replace them.
Distressed Breakdown: the distressed inventory remained unchanged over the past couple of weeks.
Within the past two weeks, the distressed inventory, short sales and foreclosures combined, dropped by 2 homes, virtually unchanged, and now totals 224. Only 7% of the active listing inventory is distressed and 18% of demand. Compare that to last year when it represented 28% of the inventory and 49% of demand, more proof that the market is in transitioning away from distressed sales having such a tremendous impact on housing.
Written by,
Steven Thomas
