I read this article in the latest issue of Market Matters put out by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) and was surprised by how many distressed sales are still out there. I know C.A.R. predicts in 2014 there will 55,000 short sales in California so maybe this number of months of distressed inventory should not be a surprise.
All I can say is the Napa Valley real estate market continues to improve with the number of distressed sales on the market or in escrow 15.8% and for all residential sales in the last 30 days, 10.1%. I think this will continue to decline in 2014 and by years end, be back to pre-real estate bubble levels.
- According to the latest report from Morningstar Credit Ratings, distressed inventory is on the decline, but the number of months it takes to clear distressed inventory from the market is on the rise.
- The time to clear this inventory has increased by five months from the second quarter of this year and 11 months from September 2012, according to Morningstar’s analysis. According to its forecasts, it will take 49 months to work through the private-label Residential Mortgage Backed Security sector’s distressed inventory.
- Judicial states hold about 61 months of distressed inventory, while non-judicial states hold about 32 months’ worth. Short sales made up 49 percent of distressed sales in the third quarter of this year, up from 45 percent a year ago.
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