Imperial Valley Shadow Inventory Real Estate Exposed
by Frederic Din, REALTOR(r) and Your Imperial Valley Housing Specialist
A day doesn't go by when someone either a home buyer or real estate agent mentions “shadow inventory” and they both have opinions regarding this newsworthy topic, as well I do too.
As a REALTOR(R), my role is not only to represent the best interests of buyers and sellers but to also offer my advice, perspective and market value opinions to my clients. Over the last three years I have provided over 3,500 real property market value opinions, often referred to as “Brokers Price Opinions”, or “Market Value Summary’s” or “Comparative Market Analysis” reports, each differing in the type of information requested by the vendor who is typically a bank, mortgage lender, insurance company, or investor and how they’ll be using the market value information to provide intelligence regarding the disposition of their property or prospective decision regarding a mortgage, note, or insurance product.
These reports give the vendors a snapshot into the market activity, the number of homes on the market, the range of sales, and various short and long term trends usually over a 60-120 day period, a sort of report format crystal ball. Earlier in the month I wrote how real estate prices in the Imperial Valley have stabilized and are showing signs of a slight increase
Imperial Valley Real Estate Prices Increasing in the El Centro CA MSA in 2012 and how available housing inventory is decreasing and leading to multiple offers on homes and offers over asking price on several properties. There are even areas throughout the Imperial Valley that are building and selling brand new homes, which is another indicator of a change in housing prices and I mean a change for the better, but what about “shadow inventory” in the Imperial Valley?
It seems as if shadow inventory from a national perspective is about the same as it was last year at about 1.6 million houses which experts predict is about a six-month inventory supply and it seems the inventory is coming on “...as fast as investors and cash buyers can snatch up these properties before new shadow inventory is released...” according to an article by Ethan Roberts, an InvestorPlace Contributor, the link to the full article is here http://www.investorplace.com/2012/03/the-shadow-inventory-darkening-housing/ and he states “Home sales can’t rise until the foreclosure backlog gets cleared, but that’s not happening nearly fast enough” but what’s happening in the Imperial Valley?
While my research is thorough, its really only a glimpse of shadow inventory locally and it is not a complete look at every single lender or banks “on the books” delinquent or defaulted mortgages. For the purposes of simplicity and understanding to my readers, my shadow inventory exposure is going to review the last four months of bank owned REO properties and their relationship to marketed or listed properties found in the local multiple listing services otherwise known as the Imperial Valley MLS.
Meaning, I’m going to compare how many bank owned REO properties are in that status and minus out any properties that have already sold or have been listed, therefore the remaining inventory represents the shadow inventory by not yet being released to the public for sale. The approximate number of bank owned REO foreclosures in the Imperial Valley from a period of November 28, 2011 to March 26, 2012 is about 167 properties and out of that total, a 108 properties are not listed in the local multiple listing services (MLS). These properties may be listed by outside agencies or simply awaiting to be assigned to an REO agency like my company. I’m including a map below of the “shadow inventory” I tracked below so you can have a visual representation.
So how much inventory does 108 properties represent in terms of monthly sales or homes that come onto the market place at any given time?
A three month total of all Imperial Valley MLS sales are 113 in December 2011, 87 in January 2012 and 84 in February 2012, which averages to about 95 homes sales each month. Currently there are 136 homes in an active marketing position on the MLS which means, these home are available for sale and are not in some type of off market status such as a pending or contingent sale.
Out of the total 136 homes for sale, a total of 58 homes are regular normal sales, meaning they’re not bank owned, REO, short sales or foreclosures. A total of 40 homes are bank owned REO foreclosures and remaining 38 homes on the market are listed as short sales. Based on recent inventory numbers these homes will be sold within less than two months, meaning supply of homes for sale is low compared to the number of homes on the market which means this is a sellers market.
What about the shadow inventory of 108 homes not yet for sale? Even if all of those homes made it onto the market within the next two or three months and none of the 136 available homes sold, there would be a total of 244 homes for sale and they would represent about a two-and-a-half months supply of inventory, which indicates our local area is in a sellers market. Lack of supply and increased demand causes housing prices to rise as long as financing is available and affordable.
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Get personalized information for any area in the Imperial Valley, including El Centro, Brawley, Calexico, Imperial, Heber and surrounding cities by going to ForSaleByFred.com, GetRealWithFred.com, ImperialValleyREO.com, or First Time Home Buyer Video Imperial County homeowners who are considering selling their home are encouraged to contact Frederic Din, REALTOR(R) for additional information about getting the most current market values for your home or area.
Member of the Imperial County Association of REALTORS (ICAOR). El Centro real estate – Brawley real estate – Imperial real estate – Calexico real estate – Heber real estate – Imperial County real estate – Imperial Valley real estate – Imperial Valley REO