Here is the breakdown of sales for Ventura County for November 2009. November is clearly on track to again have sales down year over year a trend that has continued since July. This is because there are fewer REO's being sold, as clearly indicated by the table. Less motivated supply will mean continued slow sales. Rates for November were over 1% lower than the year before and there was the tax credit and yet demand is still dropping. Either prices fall and sales pickup or prices stagnate and so do sales, there is no free lunch.
We had this tremendous stimulus applied to housing and supply should have been liquidated while the brunt of the stimulus was in effect but instead supply was constrained. Now we have this large overhang of "shadow" inventory that is sitting in a netherworld of not paying, not being modified and not being foreclosed on. In other words, nobody is dealing with reality. Sales will suffer as a result. The NAR, who lobbied for many of these policies, should have been careful what they wished for... because they got it.