SHADOW INVENTORY...This Market Is A Crap Shoot!

Real Estate Agent with CENTURY 21 Award CA BRE 01754681

That's all I hear...Shadow Inventory. The rate of distressed homeowners is still increasing. The amount of foreclosures is at an all time high in San Diego - 19,543. That is our Shadow Inventory, almost growing like a mold. Not black but RED. Homes that have been foreclosed on and yet not listed for sale.  I see them all over the community. When I take buyers out for viewing properties they want to know if I know when that property is coming on the market. If I know anything about it. I can't tell them a heck of a lot if it's not listed yet. Used to be you could really spot them quickly...dead grass, tall weeds and tons of newspapers and "help" advertisements littering the driveways and doorsteps. Now, it's more controlled, the  HOA's or the list agents are fined for leaving a yard go without maintenance. The neighborhoods are looking greener and the streets tidy...still the Shadow Inventory lurks like mold, waiting to be cleaned up.

Whose going to do the cleaning up? Polititians with their moratoriums and bail out programs? A high percentage of loan mods don't work and if they do not for very long. We as realtors all wait to see the latest and greatest new programs to help, but it's not working.

I say open the trickle of foreclosed homes to a steady flow. We all know there are plenty of buyers wanting to purchase these homes. Why have homes with 30-60 offers on them when the house next door is waiting, empty and available? So it's all a crap shoot as to where this market will really go this year. Here in San Diego the best thing to do is loosen the comps, tighten the closing costs credit and put your best loan forward cause it doesn't seem to be getting any easier. Gone are the low balling days and getting 3+ % in closing costs credit. I know I'll find my buyers great properties to come home to at night. It's just going to take a little more time and patience on everyone's part.

Comments (4)

Diane Osowiecki
Diane O and Friends - Benchmark Realty - Franklin, TN
Greater Nashville Real Estate

Great post.  My feeling, we tax payers have bailed out the banks...who paid back the bail outs so they could get their bonuses.  The money has to get into the hands of the buyer, first time, repeat amybe we need a "keep your house" bail out. 

Jan 10, 2010 10:08 AM
Kim Dove
Watson Realty Corp - Jacksonville, FL
Realtor - Jacksonville FL

You are so right! Things are getting more and more difficult and decent inventory is dwindling.  I say release the homes not at once but like you stated at a slow trickle.

Jan 10, 2010 10:13 AM
Robert May
Robert W May - Lethbridge Real Estate - Lethbridge, AB
Real estate consulting

I absolutely love San Diego.  It is one of the areas of the US that I would definitely recommend for Canadian investors to keep an eye on.  If I was to retire today it would be at the very top of my list of places to go.  Hopefully the prices will be affordable by the time I reach that age.


Robert May

"Please feel free to come visit by my blog and leave a comment too, it is how I meet the majority of my new friends here at activerain.  I always try to reply to comments and to return the favor by visiting your blog as well - Robert May"

Jan 10, 2010 10:19 AM
Terry L. Bursky
CENTURY 21 Award - Chula Vista, CA

Diane - Thank you for the compliment. I just had yet another "We're sorry but seller has accepted another offer" email from the list agent. Not even a counter. The offer was clean and over the comps. Always the bridesmaid never the bride. Well almost never. Tons of offers written for numerous buyers. We need more homes available instead of sitting there vacant.

Kim - Releasing more properties would be very helpful. The faucet turned on and prices fell so quickly out here in SD back in the 3rd quarter of 07. In September of 06 we had 30 months inventory in Chula Vista, now we have about 2.5 months. I say bring 'em on!

Robert - I love San Diego too..:) Prices are 40-55% lower than in the day. Who knows if the prices will take a little dip again or continue the slow road to recovery. I think this will be the year of the short sale. Many of the banks are handling them more efficiently now. If you need an agent for those canadian investors, I'll be here.

Jan 12, 2010 04:44 PM