Shadow Inventory Analysis For Zip Code 95628

Hopefully, this post can help address some of the questions raised in the comments yesterday and today about the REO "shadow inventory" question. I decided to focus on a zip code my wife and I are looking in, both for the sake of brevity, and self-interest.

95628 is a mid to upper scale suburb located in Sacramento County, and most dwellings are single family houses. According to the Sacramento Bee Home Sales Database, there were 1654 sales transactions in 95628 between January 2006 and January 2009. According to Foreclosure Radar, there were 365 foreclosures during that same time. (Note: The Sacramento Bee database includes some foreclosure sales, so the numbers aren't directly comparable.) Unsurprisingly most of the foreclosures took place in 2008 (206).

I ran a comparison of the 365 foreclosures against both the MLS and the county sales records:

Of the 365 foreclosures during that time, 260 were listed at least once after the auction date. Of those that were listed, 160 were sold. Of the 100 that were listed but haven't sold, 63 were listed at some point during 2009.  44 were sold without having been listed at all, and 46 were taken at auction but have never been sold or listed.  I defined "Shadow Inventory" as houses that haven't been listed after auction, or haven't been listed since 2008 and haven't sold. That leaves 83 foreclosures in 95628 that are off the MLS map, or over 27% of the MLS + Shadow total.

Clearly this is a market in flux, and there is a significant amount of bank-owned inventory in 95628. Ominously, Foreclosure Radar shows another 177 pre-foreclosures there right now, with 49 auctions scheduled. I don't expect the pressure from distressed sales to end any time soon.

Sacramento Regional Real Estate Trends for March 7, 2009

Another week without any remarkable trend changes. Inventory is trending slightly downward, and asking prices are showing a small increase. Sub $200K inventory is falling off in Sacramento and Yolo counties, which may explain the price action. My wife and I were on the housing prowl this weekend, and we visited several open houses and new developments. There was remarkably little traffic, which was due to the great weather (according to some agents we talked to. The weekend before the low traffic was due to the bad weather. :) At all the new developments we viewed, we were the only visitors. So far, according to my data and our on the ground experiences, the market looks absolutely dead.

Sacramento Unemployment Hit 10.4% for January

The just released jobless numbers are especially bleak for Sacramento, where the January 2009 unemployment rate hit a shocking 10.4% (pdf). EDD also revised their statewide unemployment rate upward to 10.6% from the 10.1% reported earlier. Most counties in the state now have unemployment in double-digits. The Sacramento Bee has a map of the carnage.