As the big Attorneys General settlement begins to sink in the banks are shifting and migrating away from the sale of Individual REO’s ( real estate owned or foreclosed homes) and this change in the retail market and REO’s influence is shown in the Phoenix, AZ marketplace. The REO’s there our at all time lows and guess what happened to home prices? They soared 33.1% over last year at this time. Now here in Sonoma County not only do we have a scarce REO inventory but scarcity THROUGHOUT the market as the following slides show. As REO’s are sold in bulk to large investment groups and sold at auction with more and more bidders, we will most likely NOT see all that big a segment in the retail or “street” marketplace. The graphs tell the story:
As you can see from the first graph, REO’s are down 63% over last year at this time. Whatever the reason, the absence of these listings will increase median price and having little REO’s will make the inventory MORE scarce and increase bidding for existing stock–hence RAISING prices. How much? Your guess is as good as mine. But with rates in the Upper 3% range the demand should remain high. Our “trough” or “bottom” came in 2009. The consumer KNOWS prices are on the rise and that this is a golden buying opportunity.
The graph below show how SCARCE inventory is THROUGHOUT Sonoma County. Our Month’s supply of Inventory has plummeted by 71.3%. Every buyer KNOWS this as they and their Realtors compete against each other for a few properties with MULTIPLE offers.