We typically expect MLS inventory in the 4th to quarter begin dropping but boy howdy, inventory levels really dropped this year! We are at the lowest level since starting this project in 2009 and on a long-term downward trajectory in all three segments of sale type.
To see a graphic illustration of this trend view the charts and tables: http://www.centralorproperty.com/Central,ORTrends.html
Reminder: the charts and tables do not include bare land, multi-family homes, time shares or mobile homes without land.
Bank Owned (REO) inventory remains but a fraction of total inventory in Bend and Redmond. Total REO inventory is down approx. 85% below peak levels.
Future availability of this segment remains uncertain as government intervention and the developing reluctance of lenders/servicers to foreclose in the first place or release for sale their current inventory has slowed the flow of these properties to the market.
The continuing saga of the fate and actual size of this “shadow inventory” I believe will continue to be shrouded in uncertainty for quite some time. What we do know, is most homes for sale in this segment sell quickly.
Short sale inventory continues the long-term slide as well. Total Short Sale inventory is also down approx. 85% below peak levels.
The Mortgage Debt Relief Forgiveness Act expires in just a few weeks and may have slowed down this segment. Most “experts” believe the act will be extended and retroactive if extended after the deadline.
Of potentially equal importance I believe, in my face to face experience with most distressed home-owners they have no intention of short selling or even letting go of their homes in any way. What happens with the distressed homeowner segment whether it is short selling, foreclosure, loan re-modification or some other form of settlement will be pivotal to future market direction.
“Non-Distressed”/“Traditional” Inventory is roughly half of what it was at peak levels since starting this project in 2009. The downward trend is less pronounced than short sales and REO but a significant downward trend nonetheless. An overwhelming percentage of this segment experiences long marketing times, expirations and terminations as most list prices continue to be misaligned with what current market conditions will bear.
Looking forward, we are right in the middle of the seasonal low inventory period and typically expect tighter supplies in the coming months. The list-to-sold ratios however, indicate future MLS inventory will fall below seasonal levels of the past 3 yrs.http://www.centralorproperty.com/Central,ORTrends.html
We are also near the typical end of year jump in expirations which will put a big, typically short-term dent in inventory if this is a typical year. Whatever that is these days!
Final Thoughts
Our market has definitely strengthened. Some might argue it is an artificial development while others will argue it is a sign of recovery. What can be said for certain is we have experienced a long-term and significant trend of declining inventory accompanied by price firming and appreciation in many areas throughout Bend, Redmond and Central Oregon.
Supply is tight and appears this will be the case at least in the near-term.
Merry Christmas!!!!!!!!
