Nevada City Virtual Tour

Friday, February 3, 2012

SHADOW INVENTORY WORRIES

SHADOW INVENTORY WORRIES









There were 2.38 million unsold homes on the market last month, the fewest since March 2005. That represented a 6.2 months' supply at December's sales pace, the lowest since April 2006 and down from a 7.2 months' supply in November.








However, the inventory of unsold homes tends to decline in winter.  (what? is it because more homes list in summer than winter?)






A supply of 6 months is generally considered ideal and anything higher suggests prices will decline further.






The NATIONWIDE median sales price fell 2.5 percent to $164,500 in December from a year ago. For 2011 as a whole, prices dropped 3.9 percent to an average of $166,100, the lowest since 2002.






Further pressure could come in the months ahead as banks finish working out kinks in the foreclosure process and push more homes onto the market.






"That so-called 'shadow' inventory has to come to the market eventually and will keep downward pressure on home prices long after a pickup in building and sales activity"





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