Existing Home Supply Falls by Nearly a Year

As reported by the National Association of REALTORS®, the number of Existing Home Sales dipped last month, ending the metric's 5-month winning streak.

Newspaper headlines today are overwhelmingly negative on housing. You'd almost believe this year's housing recovery had ended.

That's hardly the case.

See, the other side of the Existing Home Sales story is that -- while the number of units sold did fall by 3 percent -- the existing supply fell by nearly an entire month.

To home buyers and home sellers, this is huge. Home prices are based on supply and demand and with supplies plummeting, it means that home prices are poised to rise.

Indeed, dwindling inventory isn't "news" to today's buyers. Multiple offer situations have been common since the start of the summer and, should supplies fall further, they may soon be the home-buying rule rather than the exception.

Since peaking in November 2008, existing home supplies are down 23%.

The Recent Foreclosure Moratorium affect on Home Purchasing and Those asking for help...

If you have been already putting offers on homes and to try to pick up that next great deal, don't expect a whole more of opportunities to come your way this summer. With the latest 90 day Moratorium of Foreclosures, there will be an even tighter lock-down on the current inventories in California. Lesser amount of homes going to foreclosure will tighten up the already decreasing inventory, making that deal harder to come by.

In simple Supply/Demand terms, the demand for homes has increased steadily over the last 4 months and the Supply of homes as sharply decreased. This bottle-necking of Foreclosures isn't going to help in a much needed Inventory increase for buyers looking to get into the market.

On the other hand, is the governors 90 day Moratorium even going to work for those that need it? Historically , those that are in Notice of Default and are getting help from their bank for a loan modification, tend to default on the loan within the next year anyways. The offerings that the banks are giving aren't what the home owners are needing. Homeowners are looking for major reduction in payment, interest rate and/or principle reduction. Yet the banks, for the most part, aren't going jumping to do major changes to the current financing. Most of these loan mods are for a temporary period and is more a band aid for people to continue in making their payments.

Both Sides of the Housing Market...

My weekend was filled with 2 Open Houses in the Corona area. Within 4 hours or so my staff and I had a visit of over 20 families. For those that are not too familiar with the activity for an Open House, that is a substantial amount of people in a short period of time! After receiving 4 offers by Monday morning( 48 hours later), my conclusion is that the Real Estate market is alive and well. There ARE people buying their first home and people looking long term for investment/rental properties. Times couldn't be any better to buy Real Estate. I have been really seeing this movement for the last 6 months but more so recently. I'm sure the economic stimulus package and the governments tax credit of $8000 per couple did hurt matters any...

Unfortunately, the media today paints a much different picture of what is occurring with Foreclosure and Short Sale properties. Its commonly understood that Negative publicity always sells out the Positive. In the real estate example, the negative or the loss of a home by a family due to foreclosure, is something to understand and to learn from. Yet on the flip side, there is always a gain (or positive side) with another family that benefits, either with a new home for there family or a Rental property for their future. Its this positive that the media hasn't talked about at all. Being an agent and witnessing Real Estate move at the ground floor level, amidst daily transactions on selling and buying, I feel that the media could focus a bit more on the opportunities versus the losses within the housing market. I feel we all need a little bit of the bright side right now. Let me know what you think...