California Housing Inventory Hits 5-Year Low

From the WSJ.

California's inventory of unsold, previously owned homes shrank to a five-year low in December, in another sign that the state may be coming out of its worst housing slump in decades.

The supply of unsold single-family homes dropped to 3.8 months from 5.6 months a year ago and 16.6 months in January 2008, when inventories were at a peak, according to estimates released Friday by the California Association of Realtors. The inventory levels are now at their lowest level since 2005, resulting in frenzied sales with multiple offers in some cities.

Running of the Bulls believes that the housing bottom is in nationally, although some states and cities have further to go on the downside.  However, other areas are showing classical signs of a bottom.  This is one as states that lead us into this mess are the ones first coming out.

Comments

[Kinga]

It is defaltion...

The Real Estate bubble was so huge,that we still have another 30% drop. Dont forget what brought it up.

fwiw, this needs to washout before we start anew and even stronger. The problem has been that the financial industry has been too strong in Washington probably since Reagan. The Fed was created in the early 1900's to fix congress problems. For the last couple of decades, the Fed has become a political tool.

[Mark G.]

and the builders are cranking back up as thousands if not millions of foreclosures patiently await in the pipeline. Who wins the race, the builders or the banks? The loser will see themselves right back to where they were 2-3 years ago

[Richardhg]

The banks are no longer forced to write the values of their loans to market, and as a result, they are ignoring very large numbers of loans that they would have been forced to foreclose in the past, to try to reduce the 'official' housing inventory figures.

Mortgages that are in default by more than $300,000 are being ignored, and banks are allowing these to remain on their books as assets even when payments have not been made for a year, accruing further profits with mythical late fees.

This is continuing, even when the lenders have been advised by the lenders via legal notifications that the party is over.

Since the law changed regarding "mark to market", the entire reporting structure has changed.

Yes, property values will drop another 30% and maybe even further. Many of the jobs that were here 2 years ago are gone for good, and more are leaving every day.