Months' Supply of Inventory --- down to just 2.7 months in Oakland CA

OAKLAND CA Month’s Supply of Inventory at 2.7 months in August 2011?

Taking a look at ALL of Oakland CA’s inventory of homes – detached single family homes, condos, townhouses, duets, etc --- I had to do a double take.  As of end of August, the month’s supply of inventory is down to 2.7 months, compared to 4.5 months in August 2010. But what’s notable is that with the exception of the fourth quarter 2010, it’s been a downward trend for a year.

The blue line represents average days on market.

Under contract per month

This chart shows an upward trend towards buying. Good! That seems to suggest less buyers “on the fence”. As a matter of fact August 2011 number of properties in contract is almost double what is was the same period of time a year ago.

Median list price versus median sold price

August 2011 medians are in reverse of where they were a year ago. In August 2011, median list price is higher than median sold price. As we move towards the 4th quarter, median list price also moved higher than median sold price which suggests that the sellers may be buoyed by the activity and are beginning to interpret this as a sellers market, right or wrong. In a way, it would appear that it is a seller’s market based on the surprisingly low months’ supply of inventory.  InvestorWords.com defines Seller's market as "A market which has more buyers than sellers. High prices result from this excess of demand over supply."

Where are the deals?

If traditional thinking says that the best deals are properties that are priced below market, and that these properties are usually described as distressed, i.e., short sales and foreclosures, then this chart may give the deal-seeker an idea of what to look for.