Based on results from the past 4 years, short-term declining inventory count is more than likely to occur in the next 30 days. After that, expect a rise in list to sold ratios followed by a rise in inventory however, if trends of the past few years continue, expect the spike in inventory to be less than previous years.
While the number of sales and pending sales is nearly flat, the number of new listings has decreased significantly resulting in a very narrow gap between these trend lines.
Expired, terminated and withdrawn listings trends spiked end of November as expected but significantly below that of last year. Historically, End of December experiences the largest count of this segment for the year. The past three years saw this segment exceed 700 at the end of December.
Expect this potential inventory segment to overshadow potential REO inventory.
Overall current trends are resulting in significant downward pressure on listings count in the near future. The expected end of year spike in expired listings will create significant downward inventory pressure, at least in the short term.
First page
Average List to sold ratios for 2011 y.t.d., stayed at 1.8, continuing to remain the lowest average yearly ratio since beginning this project in 2007. December, while still early is at a historical low of 0.1 .
Second page
The past 14 months list to sold ratios trend in Central Oregon is trending down. Most outliers are downward spikes which is a reversal of the past.
Third Page
The past 3 months list to sold trend is dropping steeply. All outliers are downward spikes.
Fourth Page
· New listings trends down steeply.
· Sold listings trend very close to flat.
· Back on market listing trend close to flat.
· Pending listings trend close to flat.
· Expired, terminated/withdrawn properties continues to be a roller coaster ride with a small bump end of November and a current slight downward trend. Expect this trend to spike real big end of December. This segment remains the largest source of inventory reduction and will more than likely contribute more to future inventory levels than REO.
· Fifth Page
Average sales per business day YTD is right at average since beginning this project in Jan of 2010 and very close to flat. Sept, Oct and Nov so far are below levels last year so this metric should be watched closely in the coming months. We are headed toward a period where we can expect declining numbers
View charts at the bottom of the webpage in PDF format
11/30/11
Bend and Redmond REO inventory moves up, November over October REO levels but remain below average. Short sale inventory in both towns is close to flat and non-distressed inventory continues its decline. Expect a significant drop in inventory tonight at midnight as many non-distressed listings will expire as well as some short sales and REO.
November 23, 2011
Total inventory in Bend/Redmond has declined for the fifth month in a row. In the meantime REO inventory continues to edge up very slightly. Expect to see big declines in inventory the next few weeks as many non-distressed homes are set to expire 11/30 and 12/31.
http://www.centralorproperty.com/Central,ORTrends.html
November 14, 2011
Quick Summary:
Short-term declining inventory count is more than likely to occur in the next 2 months.
While the number of sales and pending sales is on a slight decline, the number of new listings has flattened from a steeper decline. Expired, terminated and withdrawn listings trends are on a very steep upward trend. Historically, Dec, 31st is a big day for expired listings.
These trends are resulting in downward pressure on listings count in the near future. The expected end of year spike in expired listings will create significant additional pressure toward inventory reduction, at least in the short term.
First page
Average List to sold ratios for 2011 y.t.d., ticked down by 0.1, continuing to remain the lowest average yearly ratio since beginning this project in 2007. Variation continues to tighten up.
Second page
The past 14 months list to sold ratios trend in Central Oregon held close to flat with another slight reduction in variation. Most outliers are downward spikes which is a reversal of the past.
Third Page
Average list to sold ratios on the 3 month chart dropped 0.3. Trend is close to flat and right at average with a slight recent bump up. All outliers are downward spikes.
Fourth Page
· New listings trends slightly down with a very slight recent uptick.
· Sold listings trend slightly down as well
· Back on market listing trend slightly up.
· Pending listings trend is slightly down.
· Expired, terminated/withdrawn properties continues trending up significantly, remaining the largest source of inventory reduction.
Fifth Page
Average sales per business day YTD is right at average since beginning this project in Jan of 2010 and on a slight downward trend. Sept, Oct and Nov so far are below levels last year so this metric should be watched closely in the coming months. The past two years Jan and Feb have been significantly below average.
View charts at the bottom of the webpage in PDF format at:
http://www.centralorproperty.com/Central,ORTrends.html
November 11, 2011
Been thinking for a long time about putting together a summary of REO Listing/Sales activity. Thanks to a request from a guest in this community, I was inspired to turn on my after burners and get it done.
Like most of the charts and tables I present, this data shows the extreme amount of variation present in our market. Predicting value is tougher than it ever has been. Many folks expect to put a set value on the homes we look at and the truth of the matter is, that just isn t real practical as the data points out. One must consider variation as well as circumstances surrounding a particular home at a particular time. Everything changes fast in this market and one set rule will never apply to the matter at hand.
The short marketing times do tell us that list price is definitely competitive enough to attract buyers. One would be hard pressed to convince me that the REO market looks very much like a sellers market. ...at least for now.
http://www.centralorproperty.com/Central,ORTrends.html
November 09, 2011
There has been a lot of discussion about REO lately so I am posting inventory results more frequently.
Bends REO bump up flattened so far this month and Redmond experienced its own bump up this time. Inventory levels are still well below average and demand for REO remains high. REO hitting the market is selling very quickly with many multiple offer situations.
October 27, 2011
Bend REO pops up
http://www.centralorproperty.com/Central,ORTrends.html
Percentage wise, we had a big jump in REO inventory in Bend but still well below average for the past 23 months. Total inventory is still trending down as the number of short sales and non-distressed inventory declines.
Redmond REO popped up at a lesser percentage
Previously a question was asked concerning the reporting of REO. Reo data in these reports include all single family dwellings that have been reverted back to the lender, or taken by a taxing authority etc.
Other REO:
Mortgage insurers or any entity with a vested interest in the property or authority to utilize the property as collateral for a debt may seize the property. Uncle Sam and other government agencies are great examples of other potential Real Estate owners.
Quick notes on the REO selling process
Lots of folks come to me with information about how the process works. It is usually gleaned from the internet, from a friend or neighborhood, some Real Estate Correspondent in New York, a blogger hiding behind his monitor in a dark closet and many times the rarely correct media via a 3 minute sound byte.
There are many details to be known about the process which is constantly changing. A truism today could very well be a falsehood tomorrow. Like everything else in life, if you want to know how widgets are made, your best source of information usually comes from a person in the widget factory.
Not to sound old fashioned but if you can at the very least speak with that individual on the phone, you will be far ahead of the game. Meet them in person at the factory and you will be much better informed than anyone else. In the quality improvement world we call that Gemba Kaizen http://www.processexcellencenetwork.com/glossary/gemba-kaizen/ Who knows, you just might make a new friend too J
http://www.centralorproperty.com/Central,ORTrends.html
October 12, 2011
Quick Summary:
We experienced another increase in avg. qtr over qtr sale price. Two quarters certainly don t indicate a trend but good news it is, however you like to slice it. The nearly year-long low inventory of active REO on the market coupled with high demand for these properties is more than likely the reason for price firming. Could possibly be short lived because of the looming shadow inventory but then again, the shadow inventory continues to just loom and REO properties continue to sell quickly with multiple offers very common..
Details:
Table1
Historical Annual Price, GLA and Sales # Trends 2000 to present
3.0% depreciation year over year for 2011 ytd based on average sale price. This is a 0.8% improvement over the rate of 3.8% depreciation reported in July.
0.6% depreciation year over year when using price per sq ft. Perhaps a better measure than avg. sale price especially since home size is declining. This is a 1% improvement over the rate of 1.6% depreciation reported in July.
Table 2
Historical Quarterly Price, GLA and Sales # Trends 2000 to present
Quarterly appreciation of 1.4% 3rd quarter over 2nd quarter. This is the second quarterly appreciation in sale price in a row.
97.1% average selling price/asking price and 92.4% of original list price. These are the strongest numbers since 2006.
Chart 1*
Monthly sales count chart shows its typical bumpy results. Number of sales appears to have leveled out but variation is high as the charts indicate, so we ll probably continue to see wide swings month to month.
Chart 2*
Monthly price chart shows its typical bumpy results as well however, 2011 shows a much tighter grouping of the data with a strong upward trend for most of the year.
Chart 3*
Monthly appreciation chart shows yet another bumpy ride with the trend line very close to flat. 2011 shows a much tighter grouping of the data as well.
Chart 4
Annual Historical Price Trends 2000 to present. We are near 2003 home price levels per this chart and depreciation has slowed down substantially. Variation continues to decrease.
Chart 5
Quarterly Historical Price Trends 2000 to present. shows the long decline in depreciation as well as the blip up 2nd qtr 2011 over 1st qtr 2011 and 3rd qtr over second qtr.
It also tells us we are actually in the least variable and most predictable two year cycle since the beginning of this century (see distance between red lines).
Chart 6
Historical Annual Appreciation Rates 2000 to present. This chart is currently showing a huge improvement in appreciation (depreciation) rate. Average is right around 2.8% yet the swings are just amazing. Equally amazing, despite the wide swings, the overall average is right around decades of national housing price average appreciation. Maybe we re just getting back to close to normal???
*Unless one or all of the monthly charts (first 3 charts) start to show a significant trend, consider them pretty useless as well as any media reports of a month over month statistic, unless it is incredibly significant or a noticeable trend develops. My main reason for sharing these charts is to illustrate the predicted range (red lines) and the uselessness of monthly comparisons, unless of course a trend develops or a big change occurs above the predicted range (past the red lines).
**A quick note on the charts: The red lines indicate the predicted performance of the process. The wider apart they are the more variable the process that created them. The more variable the process is, the harder it becomes to know where the next point will land. The opposite holds true as the red lines converge. Chart 5 does an excellent job of illustrating this concept and shows us that we are in the most predictable period since the beginning of this century.
Predictability is often the most ignored metric of any process and yet is the most important. Recently however, public and corporate uncertainty concerning the economy and government actions is in the headlines almost every day. The ignored metric of predictability has manifested itself by the resulting uncertainty that now permeates our society even though it has been largely ignored until recently!
10/03/11
Quick Summary
In this quick summary the thoughts expressed on 09/04/11 remain essentially the same with some additional thoughts added in itallics:
We have been and are currently experiencing flattening to downward pressure on inventory coupled with close to average sales activity. Positive appreciation experienced 2nd qtr over 1st this year could very well be repeated if current trends continue (see first chart).
The disposition of current and future bank owned assets however, remain a mystery to most of us, creating a lot of uncertainty. Even so, a doubling, tripling or quadrupling of bank owned inventory today wouldn t result in much of an inventory increase and would more than likely sell quickly as has been the case.
Expired listings continue to be a significant potential source of additional inventory in the future.
If I were the CEO of a widget company and this chart reflected percent defective product returned, a very important question to me concerning what the charts are telling us would be, are recent results compared to past results and current trends creating a more or less compelling reasons for people to buy my product?
I would then ask my leaders and workforce what the top 3 to 5 internal and external factors were that contributed to the current trend. I would follow that up with another question what are the top 3 to 5 internal and external factors that would swing this trend the opposite direction?
Once accomplished, this task will have taken us a long way toward understanding the rest of the story aka, the full context. Any takers on identifying the factors driving current trends or factors that might push us the other direction?
View charts at the bottom of the webpage in PDF format at:
http://www.centralorproperty.com/Central,ORTrends.html
First page
List to sold ratios for 2011 remain the lowest yet since beginning this project in 2007. 2011 list to sold ratios are below that of 2010 and the villain I refer to as variation continues to tighten up. If the current downward trend repeats in the coming months, we will see a significant reduction in the average list to sold ratios from 2010 to 2011 and I just might lose the inventory burrito bet because of my low end guesstimate of inventory.
Second page
The past 14 months list to sold ratios trend in Central Oregon held close to flat and slight reduction in variation continues. Most outliers are downward spikes which is a reversal of the past.
Third Page
Average list to sold on the 3 month chart dropped from 2.0 to 1.7. The past 3 months show a steady, typical decline in list to sold ratios. Variation improved as well. All outliers are downward spikes.
Fourth Page
· New listings trends up.
· Sold properties are trending up more than new listings narrowing the gap significantly. September is usually a strong sales month.
· The Back on market property trend is down.
· Pending property count trend is very close to flat.
· Expired, terminated/withdrawn properties trended up significantly, remaining the largest source of inventory reduction. Because of this, I believe this potential future inventory remains more significant than the REO shadow inventory . Most expirations occur at the end of the year, quarter and month, creating wide trend swings.
Fifth Page
Average sales per business day YTD is right at average since beginning this project in Jan of 2010. Short term trend is up typical of September and overall trend is very flat indicating that demand has remained fairly constant since beginning this project.
View charts at the bottom of the webpage in PDF format at:
http://www.centralorproperty.com/Central,ORTrends.html
09/04/11
Quick Summary
We have been and are currently experiencing flattening to downward pressure on inventory coupled with close to average sales activity. Positive appreciation experienced 2nd qtr over 1st this year could very well be repeated if current trends continue and some or all of historic trends occur again (see first chart).
The disposition of current and future bank owned assets however, remain a mystery to most of us, creating a lot of uncertainty. Even so, a doubling of bank owned inventory today wouldn t result in much of an inventory increase and would more than likely sell quickly as has been the case.
View charts at the bottom of the webpage in PDF format at:
http://www.centralorproperty.com/Central,ORTrends.html
First page
List to sold ratios for 2011 remain the lowest yet since beginning this project in 2007 with a typical August drop. If the typical downward trend experienced the past 3 years repeats, we will see a significant reduction in the average list to sold ratios from 2010 to 2011.
Second page
The past 14 months list to sold ratios trend in Central Oregon held close to flat.
Third Page
The past 3 months show a steady, typical decline in list to sold ratios.
Fourth Page
· New listings trends continue to move down.
· Sold property trends are moving up which is typical. September is a strong sales month.
· The Back on market property trend is down.
· Pending property count trend rose very slightly.
· Expired, terminated/withdrawn properties trended up slightly. While remaining the largest source of inventory reduction, the gap has narrowed significantly with sold properties. Most expirations occur at the end of the year, quarter and month, creating wide trend swings.
Fifth Page
Average sales per business day YTD is right at average since beginning this project in Jan of 2010.
View charts at the bottom of the webpage in PDF format at:
http://www.centralorproperty.com/Central,ORTrends.html
09/24/11
http://www.centralorproperty.com/Central,ORTrends.html
Total inventory levels in Bend took a downward turn in September contributing to the 2011 trend of inventory remaining much lower than last year (first chart). REO remains approx. 60% lower than last year in Bend and short sale inventory is much lower as well. Short sale inventory however, has been on an upward trend most of the year, creating a big and growing spread between short sale and REO inventory (chart 2).
Additionally REO is half that of average since beginning this project and most of this year has been far below the lower control limit a very significant event (Table and chart 2). If we follow the conventional wisdom that high or rising REO inventory depresses prices it would seem prudent to ascertain that declining REO inventory will result in the opposite effect on prices. I believe, under current conditions, we have a very strong chance of seeing another quarterly price increase or at the very least, a small change in either direction..
Although I haven t started charting the results for Redmond, you can see similar trends in the table. REO in Redmond is at historically low levels.
These trends continue to create a tightening supply of homes in Bend and Redmond for the buying public to choose from as the majority of non-distressed properties remain listed anywhere from 10 to 50% or more above what the buyer has become accustomed to and short sales continue to be problematic for a long list of reasons.
Example: Just saw a short sale go from short sale contingent status* at $127K list to an active REO at $165K list price. In this case the seller s lender pursued the foreclosure process instead of accepting the short sale. The lender (now owner) believes the property is worth $38K more than it was listed at as a short sale.
*Short sale contingent means the seller has accepted the offer and the transaction is now contingent on the sellers lender approving the terms of the sale agreement.
Current inventory conditions strongly support another potential quarterly rise in average sale price depending on demand. So far, September sales are on par to be at or near levels of last year. September is usually a strong month for number of sales.
At the same time, there are many recent news reports of the big banks at the beginning stages of releasing their REO inventory to the market. This potentially significant change of course will affect the current dynamic of our market. Using the charts coupled with an understanding of past price trends will be a useful way to gain understanding of the significance of this change.
One more quick note the charts are telling us that Inventory levels are very unpredictable. Look back to the events of the past few years and one might understand why. If I were asked to give my opinion of the biggest reason why inventory levels have become unpredictable, I would say it is hands down due to a highly contagious disease by the name of tinkeritis. Tinkeritis leads to too many attempts at changing the process with little regard to the data and a lot of regard toward ones agenda, perceptions or beliefs, creating high levels of variation the father of uncertainty.
In my opinion, we need to clear the kitchen of a lot of agenda driven, regulation creating, social engineering crooks and let the bread rise or fall on its own, free of banging, clanging and bad vibrations that always negate an otherwise good recipe. Whatever direction it takes, some will lose and some will win. Those that lose will have another chance to win or lose again and those that win will have another chance to win again or maybe lose. That is how a free market works isn t it?
For more detailed information and to see trends:
http://www.centralorproperty.com/Central,ORTrends.html
September 15/2011
Quick Summary:
2011 still shows sale price depreciation year over year albeit at much lower levels than the recent past. Sales activity is slowly declining. My belief is the biggest reason is the approx 60% reduction of foreclosed homes on the market causing buyers to wait for the shadow inventory to materialize. Additionally, non-distressed sellers continue to list much higher than recent sal
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