Sonoma County REO Inventory Dries Up

Hi HHB,

Thanks for your comments and kind words about my predictive abilities. I would hate to be borderline irresponsible, but I'd also be doing my buyers and sellers a disservice if I didn't talk to them about what is going on, or at least what I see is going on. 

From the trenches I can tell you that low rates are only part of the demand story. Many transactions today are cash with a significant percentage of those from investors. They weren't buyers a year ago, so their return to the market has ratcheted up the demand side and created pressure on owner-occupants who can't compete with an all cash offer. 

We have talked about the short inventory in office meetings and nobody is sure of what is happening. One thought is that sellers see an uptick in the market and want to hold on for higher prices down the road. My feeling on that is that market trend analysis is already an impossible task and most homeowners aren't following prices that carefully. It might just be that people are locked into their locations unless they are transferred or go through a divorce or other change of family situation. I know that if I had an entry level home that I wanted to sell, I would certainly have it on the market right now.

I ran another chart (sorry, I can't help it) showing the distribution of sales discounts and overbids so far in June. The way to read this is that every dot over the zero line was a buyer paying less than listing price and every dot below the zero line paid over asking price.

Finally, I have been posting less both because of a busy schedule, but also because what I wrote about the housing market in January and February on my Sonoma.net blog is still my best take on the market. I may resume a busier posting schedule, but we have been at a tipping point that I wanted buyers and sellers to recognize.

HHB- 

Here's a follow up chart for Healdsburg's sales, pending, and inventory status. We did have an uptick in inventory starting in May, but we're still below trend.