Inventory of unsold homes in your area

[Rich Weese]

I was told yesterday by a Phoenix realtor that the "valley" is down to a TWO months inventory of unsold homes. Is this accurate? Normally a 6 month inventory is thought of as normal or healthy. If this is true, prices will go up and building new homes will be next sign of marketplace. Is amount of inventories going down in other major areas of country? Vegas? Florida? Rich

[Mike Morrison]

Rich, this is wishful thinking IMHO.

[Joel Owens]

"I was told yesterday by a Phoenix realtor that the "valley" is down to a TWO months inventory of unsold homes. Is this accurate?"

They may or may not be true for that area.

Inventory numbers depend on what type of product.3 bed 2 bath under 150k might be tight but everything else for example might be over saturated.

In my state of Georgia levels are lower but banks have a lot of inventory they own and are trying to put on the market for the peak summer months.

So levels might be down but that doesn't mean more inventory isn't waiting to be brought out to market.

[Nick J.]

Originally posted by Rich Weese:

I was told yesterday by a Phoenix realtor that the "valley" is down to a TWO months inventory of unsold homes. Is this accurate?

very accurate. Its creating a feeding frenzy where buyers are offering cash, over asking price. A lot of the financed buyers are getting beat out and the one that do get an acceptance, are not getting the appraisals they need to close on the property. Appraisals apparently haven't caught up and a lot of retail buyers are being required to bring additional cash to closing or losing out and having the deal fall apart.

I've been heavily involved in purchasing and working with some clients on smaller multi-families, mostly tri's and quads over the last few months. Its starting to even ripple into that niche market as we're having to make full list price offers, and some even slightly over. While the numbers are still decent, it doesn't make you feel like you're a getting a great deal knowing you're paying asking price.

On one 4plex in your neck of the woods Rich in Casa Grande, we got countered with a highest and best multiple offer situation. That's unheard of lol...Especially for Casa Grande.

[Andy Chu]

Las Vegas market has 45.2 days on single family residences (not including short sales) as of yesterday.

[Rich Weese]

Andy and Nick- This just amazes me! We continue to hear how bad markets are in those two areas, yet the stats show something different. If these are accurate, I don't understand why the banks don't drop more of the shadow inventory on the market?
Months ago, I mentioned it might be time for more new const. These #'s would be conducive to that. I know there are benefits where I'm building and think it may be getting overlooked in other areas.
What are you seeing in inventory in the other "down" areas like PHX and Vegas? Realtors, please weigh in so others can know what is really going on. Rich

[Don Konipol]

According to AZBidder.Com, prices at the foreclosure auctions have increased 12% since January 1. My empirical evidence is that this is true, as new high rise condo units (basically the one bedroom low floor, premium buildings) that I was able to buy for $150 per square foot last year have been going for $190 - $200 per foot. I have raised my bids 10-15% but am still being outbid, sometimes by a significant amount.

As to reos and short sales, banks are aware of the greater demand, lesser inventory, higher prices.

One disclaimer, my experience is for high rise condos in the valley only, not for sfr in general.

[Rich Weese]

Anyone in other areas paying attn to this? Is it basically nationwide? Rich

[Steve K]

Orlando is supposedly at 2005 levels. What that means in terms of DOM i'm not exactly sure.

Everyone on the front end of the construction industry I talk to here is cautiously optimistic. Architects say their phones are ringing again, concrete suppliers say they've remained steady since last August, etc etc.

It's either a good to start pushing spec projects again or perhaps we're getting close to times where banks release some more inventory.

[Scott Pirrie]

In Seattle we currently have about 43 days of invetory and SF's are being sold at 8% above asking price. As for Apartments ground is being broken all over the place my neighborhood alone has 1300 units going up right now! Granted Ballard is one of the hottest neighborhoods in Seattle over the last few years but, that's still a lot.

[Bryan Hancock]

Austin had 4.5 months of inventory about a month ago from what I was told at our local real estate club. That seems about right.

Rental housing in Austin is VERY hard to find for renters right now. I know some folks that were looking this summer and they claimed many popular areas had multiple offers on housing for lease the DAY it went on the market for lease.

[Drew Dickinson]

We are seeing mulitple offers within a few days when places are priced well. However, like was said above, I don't think anyone really knows what the banks are gonna do. That's a heck of a lot of inventory to be sitting on. No big surprise that the banks are pulling the puppet strings on something right? But the following is my broker's response to another broker in his mastermind. FYI, we are in the Philadelphia suburbs:

Hey Charles,

Great to hear from you!

The market seems to have bottomed out and on the West coast they have been getting multiple offers on lots of the lower end homes (under 400k). Prices haven't started going up yet, but its only been like this for about 6 months. National projections are for a short 2-3 year seller's market as all of the buyers who were left on the sidelines the past 3 years jump back in. There is a lot of pent up demand -- normally there are about 1M first time buyers every year nationally. Even though the country has increased in population, there have only been 500k first time buyers each year from 2009-2011. So those people who've been living at home building up savings are ready to buy. This has started to come to Philadelphia -- we are seeing well-priced homes get multiple offers this month. HOWEVER prices have not begun to rise yet. I am advising anyone who is holding onto a property with the desire to sell to plan on selling in spring of 2013 or 2014. I do NOT believe that there will be a huge uptick in home prices over the next 3 years because there are still a large number of underwater homeowners who cannot trade up yet until they have equity in their existing homes.

Bottom line -- the historical and empirical date seem to indicate that we are sitting at the very bottom of the market right now. Only must-sell sellers should be on the market in 2012.

[Mike Jakobczak]

I was looking at inventory levels in some key areas a few weeks ago. From what I remember Phoenix property values under 100k, inventory levels were getting near 1 month of inventory. So it look be accurate. I know Atlanta inventory levels are still low as well. But as Joel Owens said that doesn't mean the banks inventory is just as low.

I think the cause of the low inventory levels is a mixture of many things. But sooner or later they'll start to release them.

[Jeff S.]

Many (looks like the good ones) short sales have a pending status in Portland and surrounding areas.

[Justin S.]

Rich-

From AZREIA, Days inventory is at 73 right now. Based on Price range as follows:

<100K - 44
<150K - 60
<250K - 106
<400K - 143

Phoenix Median price/sq.ft has increased from $72/sq.ft in March 2011 to $83/sq.ft in March 2012.

Since Sept 2011 about 45% of trustee sales are going third party right now. This is up from about 20% in Dec 2010.

[Rich Weese]

In the info Justin is referring to, it also listed top rated states for appreciation projected for 2012-2016. AZ is # 5.

Tx is # 1
UT is # 2.

I'm VERY happy with the two states I picked to build and invest in!! Rich

[Bryan Hancock]

Texas being #1 is no surprise. The Austin/Round Rock area is going to keep booming. I see the small regionals getting more and more aggressive with lending by the week.

[Cheryl C.]

Hi Rich, my area (Northern Virginia) has very low inventory at less than 2.3 months. The low-end (under 300 or 400K) is very hot. I've been seeing many multiple offers. I'm glad I bought what I did over the past 3yrs. My latest flip went under contract in 4 days with multiple offers. It was 215K and there is very minimal inventory at that price point.

[Steven M.]

Originally posted by Rich Weese:

I was told yesterday by a Phoenix realtor that the "valley" is down to a TWO months inventory of unsold homes. Is this accurate? Normally a 6 month inventory is thought of as normal or healthy. If this is true, prices will go up and building new homes will be next sign of marketplace. Is amount of inventories going down in other major areas of country? Vegas? Florida? Rich

Rich:

I have been doing some serious research on the Phoenix market and all the positive news you hear is correct as I am toying with buying land there in the next few months for small development (I want to wait a bit longer and see if this is just a temporary nice bump-up or if it has a legs to it)). If you really want an incredible unbias analysis of the market place, read the following from the Arizona State University Real Estate Dept & Economics. They publish monthly detailed unbias reports. Most every state has a major university that has a R/E department and I like these because it's unbias and there is no profit motive, or hyperbole.

In one of the discussion articles one of economics professors here is a bit contrarian and thinks this "shadow inventory" of homes banks alledge they are holding isn't that real...or as big as the hype professes to be.

I also read you can buy expired tract maps on the cheap there. One issue they have there is a shortage of contractors and subs. But you can read all about this in the recently published articles from people in-the-know.

Good stuff here...

http://wpcarey.asu.edu/finance/real-estate/upload/Full-Report-201204.pdf

http://knowwpcarey.com/article.cfm?cid=13&aid=1160

http://knowwpcarey.com/article.cfm?cid=13&aid=1138

http://knowwpcarey.com/index.cfm?cid=8

[Karen Margrave]

In parts of Orange County, CA it's 30-60 days! and there are NO REOs to speak of.

[Steven M.]

Originally posted by Karen M.:

In parts of Orange County, CA it's 30-60 days! and there are NO REOs to speak of.

Really? If we can spread this out to all of SoCA I'd be a very happy camper...and make it last.

[Jerry R.]

Lee county has very few entry level homes now available.

There are very few REO's now and most that do come on the market are HUD's or Fannies, thus no investors can buy them.

I am currently remodeling a home in SW Cape Coral. At each end of the street there is a new home being built.

[Kent R.]

Orlando, Florida's inventory is down to just over 3-1/2 months. Confirming what Steve K mentioned, there are now less than 9,000 houses available on MLS (I believe it was just over 22,000 a year ago.)

Prices have stabilized and REOs are now receiving multiple offers.

Also, DOM is mid-90's.