Phoenix Bank Owned Inventory Continues to Fly
Posted on May 28th, 2008 by Jonathan Dalton
As has become the custom the last month, this one’s going to be a two-parter. Full report for all of the cities in the Valley will come later this afternoon.
Today’s big story? Bank owned homes are moving and moving fast … there were 1,131 closed sales of REO homes in the Phoenix real estate market over the past 30 days. Match that against current inventory of 4,256 bank owned homes and you have an absorption rate of 3.76 months.
Put another way, if nothing else came to the market, all of the bank owned homes would be sold in less than four months’ time.
Of course, bank owned homes are coming to the market all the time. REO inventory has not dropped appreciably since I started tracking the numbers separately a couple months ago. But the sales have been accelerating, staving off the assumed wave of destruction that was to hit the market when as foreclosures increased.
It still could happen if the buyers disappear but these days the opposite is taking place – buyers who have sat on the sideline waiting for homes to become affordable again are finding that has happened. You only need to know where to look.
Back with more later …
[tags]Phoenix real estate, bank owned homes, absorption rate[/tags]
This trend is gonna continue I think. It’s the other side of the coin. Sellers wait with over priced listings for the moron who’ll pay their fantasy price. Meanwhile, the REO next door closes escrow.
Once those are mostly gone, it’ll be interesting to watch your market.
It’s going to be a while before they’re gone completely, Jeff, as evidenced by the rising inventory but the sales pace that has kept net inventory falling has been encouraging.
You mentioned that you have been breaking out the REO data for a few months. It would be interested to see if the trend you are seeing is new or if that is just the nature of the REO beast.
Banks legally cannot sit on the property and wait for the market to rise. It could be the flying out the door is the normal REO sale trend rather than a shift in the market.
I started investing in REOs back in 1983 in CA when the market was coming out of a slump. Interest rate close to 11% was a normal.
[...] ( Bank owned properties) in Sacramento, Modesto, Tracy, Los Angeles and even in other states like Arizona. Perhaps this is a sign of better times and greater confidence in the housing [...]
[...] see also my colleague and friend Jonathan Dalton who says that bank owned properties are flying off the shelves. Jonathan has numbers to back that [...]