Randy Engfer's Blog

Realtors Multiple Listing Service released the statistics for June 2010, late last week. Click here for report... RMLS Market Action Report June 2010. 

Again we see inventory in the 7 month range.  This means that based on the current number of sales per month if we quit listing today it would take 7 months to exaust the supply. 

Many of us sit in anticipation of the coming impact of "shadow inventory" on our Marketplace.   When you buy a home and obligate to the financing you sign a "Note" and a "Trust Deed."  The Trust Deed is an instrument or document ('Mortgage' in the old days) that sets out the 'rules' to be followed in the event of different circumstances like default or missing a payment.  A typical cluse regarding default stipuates that after the 3rd payment is missed the "Lender" will file a Notice of Default or NOD. 

Many lenders have ceased or temporarily suspended these filings while they address the volumes of loans already in foreclosure.  Thus, "shadow inventory" that isn't impacting the inventory as yet but, evntually will.  Many experts are concerned as to the impact of these homes eventually hitting the market as REO's (Real Estate Owned by lenders, taken back after foreclosure). Once the notice is filed, depending on many variables the foreclosure process will culminate with a sale at the "court house steps" of the county where the property is located generally 6 to 8 monthas later.

Back to the statistics, Pending sales dropped dramatically year over year in spite of the lowest interest rates in decades. Alpine Mortgage was quoting 4.375% this AM.  Employment and all its related issues continues to impact the numbers.  Also, having a large impact are the extremely tighter qualifying and underwriting guidelines...but more on that next post.