The buyers are ready to buy...but where are the sellers??

A colleague recently listed a home for sale in Studio City.  He had two open houses and one more just for Realtors.  A total of 500 people came through the house.  That's right; 500.  That's a huge amount of people for one house.  Yup, there are a lot of buyers out there chasing very little inventory.  If you're thinking of selling your house, this might be the time. And if you're thinking about buying a home, don't wait too much longer -- limited inventory tends to drive prices up.

See?! It's NOT our imaginations! Inventory IS short!

Here's a terrific article from yesterday's L.A. Times about our short inventory.  I'm copying the whole thing (and bolding some very pertinent info), but for those of you who want a link, here it is.

Shrinking supply of homes for sale has upended market dynamics

The stock of homes listed for purchase has fallen significantly from last summer, in turn raising prices and homeowners' equity stakes and reducing total sales.

By Kenneth R. Harney

July 29, 2012

WASHINGTON — Though many home shoppers who assume they are still in a buyer's market find it hard to believe, one of the sobering fundamentals shaping real estate this summer is shrinking inventory: The supply of houses for sale has fallen significantly in most areas compared with a year earlier, sometimes dramatically so. And that is having important side effects by raising prices and homeowners' equity stakes and reducing total sales.

In major metropolitan markets from the mid-Atlantic to the West Coast, the stock of homes listed for purchase has dropped by sometimes extraordinary amounts — 50% or more below year-earlier levels in several areas of California, according to industry studies.

In Los Angeles, available inventory is 49% lower than it was last summer, San Diego by 53%, reports Redfin, a national online realty brokerage. In Seattle, listings are off 41%. In Washington and its nearby suburbs, listings are down 28%.

According to the National Assn. of Realtors, the total number of houses listed for sale across the country in June was 24% lower than a year earlier. The dearth of listings is often more intense in the lower- to mid-price ranges, less so in the upper brackets.

Just south of San Francisco, Redfin agent Brad Le says inventory in Silicon Valley is down so drastically — and demand so strong — that the bidding wars are spinning off the charts.

"We're not just talking about 10 or 15" offers, he says, "but sometimes 40 and 50."

Some buyers are inserting escalation clauses into their contracts to keep pace with counter-bids, and waiving financing contingencies, inspections and even agreeing to increase their down payments to counter any differences between the accepted sale price and the appraised value. One modest, 1,700-square-foot house recently was listed at $879,000. It drew more than 50 competing offers and sold to an all-cash buyer for $1,050,000 in less than a month.

Silicon Valley is in its own special economic niche, but inventories have declined nationwide. Online real estate and mortgage data firm Zillow reports that some of the steepest declines are in places hit the hardest during the bust, and where sizable percentages of owners still are underwater on their mortgages. In Phoenix and Miami, for example, 55% and 46% of owners, respectively, have negative equity.

Both cities have seen significant drops in inventory, and both are experiencing strong appreciation in home prices. Phoenix prices are up 14.7% for the year and Miami by 9.7%, according to data from research firm CoreLogic.

What's behind the widespread declines in listings?

Analysts say negative equity plays a major role — it discourages people who might otherwise want to sell from doing so. They don't want to take a big loss, especially in a slowly improving price environment. So they sit tight rather than list. Banks with large stocks of pre-foreclosure and foreclosed properties are doing the same, creating a so-called "shadow inventory" of houses estimated to total 1.5 million units.

Where's this all headed?

Stan Humphries, chief economist for Zillow, says the likely trend is for more of the same: Constricted supplies will lead to price increases, especially in segments of local markets where demand is strongest. Longer term, price increases will gradually rewind the cycle, increasing owners' equities and convincing more of them to list and sell. This, in turn, should put a brake on price increases, especially under today's super-strict mortgage underwriting and appraisal practices.

Bottom line for anyone looking to list or purchase any time soon: Though conditions vary by location and price segment, lower supplies of houses available for sale are changing market dynamics — putting sellers in stronger positions than they've been in years.

Way more sales than listings on the mls

The multiple listing service's 24 hour market watch reports WAY MORE sales than listings.  Perhaps that's because it's the end of the month and more transactions close then than at other times of the month.  Still, it's the first time I've seen this in years.  The cumulative backup offers and pendings are higher than listings, too. Here are the numbers for the last day:
New Listing (675)


Price Change (388)

Back On Market (480)

Backup Offer (381)

Expired (123)

Pending (494)

Sold (898)

If you're a seller, now may be the time to list your home.  If you're a buyer, it looks as though inventory will be short for the remainder of the summer.

Homes in Burbank between $425k and $455k

I case you're wondering about the selection of 3 bedroom Burbank homes and condos in the $425,000-$450,000 price range, I just showed several. Here's my opinion.
1225 Frederic - approved short sale in a nice neighborhood. House looks like somebody tried to flip it and ran out of money. The front needs work, there's a one-car garage, and the pool has not been maintained and is a yucky green color. Kitchen is nice, though.
2268 Ontario - regular sale in this planned unit development across from Yahoo. Each house is a stand-alone with no common walls, but no yard either. The complex was built in 2001 and each unit is very spacious, with a modern layout.
1523 Valley - close to North Hollywood, and its a regular sale. Lots of improvements but the kitchen is small. It looks like it has been added on to several times over the years. Huge yard with pool.
4268 Kling - (pictured above) I love this complex (each unit has its own 2-car garage) because it's so well-maintained and in such a nice area. This unit is a particularly good deal for the complex and the kitchen has been redone.
1211 W. Orange Grove - this foreclosure is right across from Disney school. Looks okay from the outside, a little cobbled together on the inside. Big, green backyard. May be another flip where the owners ran out of money.

Home inventory drops as sales rise, as if we didn't know

California Association of Realtors is reporting that the supply of available homes for sale is diminishing as sales increase. Oh, really? Gosh, how long has that been happening? Thanks to LALand, the LATimes real estate blog, for picking up this story, as I am never particularly interested in what CAR says.

Foreclosures and statistics

For those of you waiting for an increase in home inventory due to foreclosures, and sure that the banks are going to dump a bunch on the market any minute, here's the latest from Realtors who handle many bank-owned properties: it's going to be a trickle, not a flood. One of the reasons: the banks don't want to dump a lot of houses on the market at once because it will depress prices further.

And Market Metrics has come out with this statistic: there is only a month-and-a-half supply of inventory right now in the SFV. No surprise. The supply of houses for sale is as low as I've ever seen it, not counting brand new condos.

Sunday Reading: On-Line Housing Search Tools

Here's an excellent article from today's L.A. Times about house-for-sale search engines. The writer notes that most of them ask the searcher to sign in, and several sites then forward the searcher's info to a real estate agent. Of course. They're "lead driver" sites, and they make their money by charging Realtors for the leads, or even by charging Realtors to subscribe. They have to make money somehow, right?

Not to plug my company, but I think Dilbeck.com has an extremely user-friendly site.

...And not so good news for buyers

No, there's no news here about IndyMac or Fannie or Freddie. The news is that there are actually quite a few less listings in the east San Fernando Valley than there were at this time last year. According to the local mls's, we're down about 25% from the amount of listings we had at this time last year. (This is not true for Santa Clarita; the amount of listings are way up.) Traditionally, this part of the summer is slow for new listings. It will likely be worse in August and get a little better after Labor Day. But I think that sellers are reluctant to sell now if they don't absolutely have to.