Distressed Inventory Report 11-7-09

By George Thurtle

There is a new trend developing and that is the NTS/Foreclosed (F) home ratio keeps falling but overall in East Bellevue and West Bellevue the distressed inventory keeps rising. Only in South Bellevue did the NTS/F ratiio fall and the inventory go down. As we discussed before a falling NTS/F ratio is a good thing because there are fewer distressed homes entering the system via short sale that feed the bank owned homes which is what comes out of the backside of the process. However to have a falling NTS/F ratio while the inventory increases overall is not a sustainable trend it has to break one way or the other. If the ratios start crawling back up while inventories keep climbing that will keep downward pressure on pricing and show a longer term downward trend. Overall distressed inventories going up despite the NTS/F ratio going down will put downward pressure on pricing but in that scenario it clears out the bank owned inventory and eventually the overall number of distrssed propeorties has to fall leading to firmer pricing.

This week in East Bellevue the overall distressed inventory is at its highest level since the August 15th report. At that time there was 91 overall distressed homes, like this week, however at the August 15th report 20 homes were foreclosed while 71 had notices of trustee sale. This week there is 43 foreclosed homes and 48 NTS homes. West Bellevue shows this trend even more. This week they saw their overall inventory of distressed property jump by three homes to 66 but their NTS/F ratio actually took a dive to .83. If this ratio keeps falling then logically it should mean an overall coming reduction of distrssed inventory. But there is nothing logical about our economy or market. We could be in this weird world where we are in a “trading range” of distressed inventory and the NTS/F ratio will oscillate. The next weird trend to surface might be seeing inventories fall and the NTS/F ratio climb which would mean we are stuck in this “trading range”. I think the above little antidote on our local real estate market is more symbolic of the overall economy where you have one person making a perfectly cogent argument why the sky is falling and another person can make a perfectlly good argument why the worst is over and happy days will be here agian next spring all off of the same data.

This is very confusing and makes my head hurt. However it does look like the buying window is opening a little wider and like last year where your best buys where Q4 and Q1 it looks like the same pattern is developing just a little milder cycle. So there you have it the upshot of the report is buy a home so I can make a commission.

Click on the link for the spreadsheet. Bellevue Foreclosure Report 11-7-09

Tags: , , , , ,

Leave a Reply