With the year nearly one quarter over, inventories give no sign of a large “shadow inventory” of foreclosed homes being kept off the market.
Persistent rumors that “a wave of new properties is headed toward the market, one that is expected to prolong the housing downturn and might even cause prices to dip again” as reported in a lengthy story in the Sonoma County Press Democrat Saturday remain only rumors.
Analysts at RealtyTrac and elsewhere have estimated that there is a “shadow inventory” of 1.7 million to 7 million homes in foreclosure that lenders haven’t yet put up for sale. To put that number in perspective the annualized rate for existing home sales in January was 5.05 million units. The rumored shadow would equal between 30 and 140 percent of the entire year’s sales.
Nationally, there’s no sign of a shadow inventory coming on market. ZipRealty’s monthly report on inventories found that the supply of homes available for sale in 27 major metropolitan areas at the end of February was down about 19 percent from a year ago.
On a national basis, inventories typically rise in February from the January level as owners put their houses on the market in anticipation of the busy spring home-shopping season. This year was no exception as inventories were up 4.2 percent from January as sellers hope for an earlier and busier than usual spring season with the tax credit extended through April.
Total housing inventory at the end of January fell 0.5 percent to 3.27 million existing homes available for sale, which represents a 7.8-month supply at the current sales pace, up from a 7.2-month supply in December. Raw unsold inventory is 9.6 percent below a year ago, and is at the lowest level since March 2006, according to the National Association of Realtors.
In California, site of most of the shadow sightings, inventories of unsold homes are down 20.5 percent from a year ago. Through January 10, the months’ supply was a healthy 5.8 months, according to the California Association of Realtors. Prices in California are up 15 percent over 2009.