Monday, October 1, 2012

Orange County, California Has Only 39 Days of Housing Inventory!

Steve Thomas and  using data as of September 27 write:
The expected market time for all of Orange County is only 39 days, a low not seen since May 2005. It tends to increase with the transition from the Summer to Autumn Market, but not right now. Instead, it has been continuously dropping for the past three months. Let’s put the current market into proper perspective. A balanced market has an expected market time right around five months. At just 39 days, it is a deep sellers market.
The supply of houses on the market is getting tight across the country, but it is very tight in California. If Bernanke's latest QE money hits the economy, rather than going into excess reserves, the housing market is going to explode to the upside.


  1. Lets not overlook that existing properties that are underwater(and that would be listed in a minute were break-even possible) create a restraint on supply. So the question is, have the numbers of what is inventory demand factored in these frozen sellers hence frozen future potential buyers?

    In other words, there was once a 39 day inventory of VCR's too until reality set in.

    I suspect these low interest rates are just affirming all of this and a few dead cat bounces mixed in to boot.

  2. I wonder if I should purchase my house now, before rates and prices increase, or wait until the next bubble to burst.

  3. When you say "explode to the upside" do you mean in price?

  4. I'm confused. I thought that bubbles can't be reflated. But it seems like housing is reflating, and the technology sector is pretty hot too. What gives?

  5. I don't buy it for one second. My guess is that there is an enormous shadow inventory in California. And you can bet that if prices actually do start rising substantially, they will be met with lots of selling. I'd be willing to bet there are a lot of people that would head for the exits if only they could dump their house without losing a fortune.

  6. If I look at I can see what Real-Estate Owned properties are there which are owned by Bank of America.

    If I look at RealtyTrac I can see some homes that are reo and listed for sale, reo but not listed for sale. I can also see who is the trustee - owns them per the county records.

    The list of houses listed at the county as owned by BOA doesn't match the list of homes owned by BOA on BOA's reo website. BOA's list is much shorter.

    The situation is the same for Wells can be seen at

    Many of the RealtyTrac reo homes have their last document filings in 2010...two years old. I don't recall finding ANYTHING with an reo documentation date older than two years.

    If these homes were sold, there would be a new filing.

    It is unlikely that BOA or the other banks can ensure properties are sold right at the two year mark.

    I propose that what is happening is that the Banks aren't internally listing for sale the VAST majority of their REO property to protect the public image of their solvency.

    I propose that this is why the county records of any particular bank's REO property is much longer than the Bank's.

    I propose that records older than 2 years don't get posted to websites.

    This would explain the difference in the two lists, and would imply that there are two levels of 'Shadow Inventory'. The first set of 'Shadow Inventory' is REO but not for sale. The second set is REO, not for sale, and has been dropped from all listings (other than manual paper at the court-house.