Here is the Ventura County home sales report based on the Dataquick news release. Sales continue to perform horribly. We are at the same basic level as the mortgage market blowup in 2007 but prices are much lower, there is a tax credit and rates are much lower. There was a small bump in rates about 6 weeks ago of a half of point that may have temporarily disrupted sales but it is doubtful that is what caused such anemic sales. The data keeps pointing to a supply constrained market, the only place strong sales are seen in the low cost markets with ready supply like Riverside and San Bernardino.
The strength in the median has been a lot based on mix shift but there has been a firming of prices on the low end. As the supply becomes more constrained fewer borrowers can buy and the few who can buy are generally of the stronger financial profile.
The real estate industry who have been crowing about the recovery of the housing market will start to feel the slow sales pinch their revenue. After all, they are the rake, if the hand isn't played the rake isn't dropped. Commissions won't be made, fees won't be collected.. it will be the second leg down for an already battered industry. I also feel the lending industry, who are currently staffed up to process the HAMP wave, will then have to adjust staffing levels. Not a bright future for those in the RE business when sales stay low. Of course the NAR is renewing their push for renewal and expansion of the tax credit, they need something to artificially boost sales for their flagging membership.
The people who are doing well in this market are the trustee sale investors who are buying the supply before if ever gets to market then selling it at retail prices. REOs were one of the few things keeping the market liquid but as the trustee sale investors have become more active you see sales drop. This is a completely logical consequence of low supply and high investor activity removing motivated supply in the Ventura County area.