Distressed Inventory Report 3-5-11

By George Thurtle

An unexpected surprise this week. The overall inventory of distressed homes dropped from 317 to 307. I was expecting a mild increase. In addition like last week there was a lot of turn over in the distressed inventory. As an example in MLS Area 530 there were four new Notices of Trustee Sale (NTS) but the overall inventory for the NTS homes in that area declined from 80 to 74 homes. That is also including seven new NTS homes being added from the week before. As a result in two weeks 11 new NTS homes were added in the East Bellevue Area but there was a net reduction of 6 homes overall from 80 to 74. This means somehow 17 homes were absorbed either through a short sale, foreclosure or loan modification. Given the fact the foreclosure numbers are flat and not rising and I am not seeing inventory crossing over from NTS to bank owned then it appears that short sales and loan modifications must be removing this inventory.

If the distressed inventory keeps being reduced along with the overall inventory then there will be a floor forming under this market in the next couple of weeks. However it usually takes three weeks to establish this trend. That is why I was surpsed this week is that we had 8 weeks of continuing increases in inventory and in addition I felt there was some inventory held back as banks cleaned up their foreclosure practices that this trend would continue at a somewhat slower rate or maybe level off but a drop was not expected.

The spreadsheet is here: Bellevue Foreclosure Report 3-5-11

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