The September 2011 CAR Trends Report has been posted to the Research Data section on the Marketing Page of SAVI.
In it, The California Association of Realtors shows that California home sales improved in August on both a month-to-month and year-to-year basis, after dipping to the lowest level of the year last month. Sales of existing homes are up 8.6% from July and 10.2% from the same month last year. Median prices are still falling on a year-to-year basis, but inched up this month and are at the highest level since December 2010. This is, in part, aided by an increase in equity sales (non-distressed) which made up 56.3% of the total sales in August, compared to 40% earlier this year.
CAR explains, “lean housing inventory is another reason why the statewide median price remained stable in recent months.” Here are some takeaways from the report about inventory:
- The unsold inventory index was 5 months in August, where it has been around for the last 6 months, which is well below the long-run average of 7.2 months
- While inventory of equity and short sales are right around the long term average, the inventory index of REO properties was less than half that at 2.5 months (see chart here)
- There is a major shortage of REO properties compared to demand as can be seen in the difference between percent of inventory vs. percent of sales for the year in this chart below:
- This results in multiple offers on REO properties which drives up prices
However; the long term affect of this shortage remains to be seen and could constrain future sales if not addressed. These low levels of REO inventory will persist as long as lenders’ lack of urgency in releasing these properties continues. In early September, some major lenders have attempted to expedite the foreclosure process, which would help decrease the current shortage of REO properties. However; the impact of this possible influx of supply on sales and prices is yet to be determined.
To access the full report, click here. Does the market in your community reflect this CAR report? Tell us in the comments.