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It seems that enough people expressed interest in attending Thursday’s economic forum that they had to move to a bigger venue over at the USD campus. So if you were planning on attending, please be sure to check out the updated location info.
Moving on, I wanted to highlight some really interesting analysis recently performed by realtor and fellow panelist Jim Klinge.
I have been writing for some time about the strange mixed signals being sent by housing inventory and foreclosure activity. Housing inventory is at a level that, superficially, would indicate a fairly healthy market. Yet homes are going into foreclosure at a very rapid pace, a fact that leads one to believe that a lot of must-sell inventory could eventually hit the market.
In a recent pair of blog posts (here and here), Jim and a colleague have attempted to quantify these opposing forces. For a variety of zip codes, they have tallied up the amount of inventory that’s currently listed for sale and compared that number to so-called “shadow inventory” — the number of homes that are at some stage of foreclosure, but that are not yet listed for sale.
In the zip codes that they sampled (mostly in North County) the amount of shadow inventory was all over the map, clinging as you might expect to the well-worn tendency for the higher-priced zip codes to experience fewer foreclosures. Super-swank Rancho Santa Fe had a shadow inventory of just 7 percent of current listings, while Mira Mesa had a jaw-dropping 271 percent. There was a nice cluster in the middle, however, with 10 of the 19 zip codes surveyed falling between 30 percent and 60 percent shadow inventory. The median shadow inventory for all zip codes measured was 50 percent.
Jim points out that some of the homes in foreclosure will likely get loan modifications and avoid ending up as inventory. But, as he puts it, “there are probably just as many coming right behind them that haven’t made the list yet, so we’ll call it even.”
So these numbers probably provide a decent ballpark idea of how much potential must-sell inventory is out there in the zip codes measured. Not that it should be a big surprise to anyone who’s been following the foreclosure figures, but on the whole, the amount of shadow inventory is significant.
— RICH TOSCANO