Spread between non-distressed and distressed homes narrows
Although prices for both distressed and non-distressed homes declined in 2011, distressed home prices went down less than non-distressed — bringing the total available inventory closer together on the price scale. Radar Logic, a real estate research and analysis firm, reported last week that the recent increase in home sales may not reflect greater demand or buyer confidence as much as it reflects more sellers being motivated to accept lower bids.
Even with sellers’ increasing willingness to take a lower price, tight credit and general concern about home values over time appear to be combining to keep buyers from swarming into what is clearly a “buyers market.”
Existing home inventory lowest in six years
NAR (National Association of Realtors) reported that January’s inventory of 2.31 million existing homes for sale amounts to 6.1 months’ supply — the lowest that inventory has been since 2006. Because those numbers don’t take into account vacant homes not on the market, houses with loans in delinquency, houses in foreclosure or houses with underwater mortgages, the potential supply of available homes remains historically high.
Help and hope from the Fed?
Radar Logic concluded its report by observing that Bernanke’s (Fed Chairman) speech at the NAHB’s show last month held out hope that “the renewed focus of the Fed and the administration will lead to pro-active and innovative programs to address the housing crisis.”