A few weeks ago, I posted a blog entry about it looked as though lenders were stepping up foreclosure.  Since that time, I’ve continued to see a steady stream of REO assignments – kind of like in the good old days (all of 2008 and much of 2009).  That explains a bit about why it’s been a while since my last blog post – I’ve been busy doing occupancy checks, re-keys, negotiating cash-for-keys, overseeing trash-outs and initial services, all that fun stuff.

Housing Flood

Yesterday, the venerable and still-somewhat-respected Wall Street Journal chimed in a piece informing us that housing inventory climbed again in September – for the ninth straight month!  It’s a pretty nifty article and it gives stats from 26 metro areas throughout the United States.  In California, they provide data for Los Angeles, San Francisco, Orange County, and San Diego.  For San Francisco, the chart they provide shows that the available inventory increased by 5.4% at the end of September compared to the previous month.  Their interactive chart also has a cool feature where you can see the inventory level rise and fall for any of the metro areas over the past 18 months – and looking back, you can see that from January 2009 through December 2009 the inventory in the San Francisco area slowly declined – but it’s been rising ever since, and is now back at about the same level.

What, pray tell, could this mean?  I think it’s clear that given the overall anemic demand from buyers for most types of residential real estate that we are going to be seeing a lot of price pressure over the coming months – it could be a very cold and dreary winter for a lot of people trying to sell their houses.  And they’ll have to compete with REO sellers, who are often in great competition with each other, who absolutely-positively-gotta-sell-it and will mercilessly reduce the asking price until the right buyer comes along, although this process can take months (they don’t just give away these REOs you know – not usually, anyway).

Interestingly enough, the Wall Street Journal’s chart also provides one other interesting piece of data:  the percentage of homes that have had a price reduction as of the end of September.  In the SF Bay Area, the figure stands at 44% – which may seem high, but compared to the other 25 metro areas surveyed, it’s probably a little bit below average.  I wonder, though – will we be seeing that number pick up over the coming months?  With the way things are going, I don’t see any way around it.