It's déjà vu all over again. MLS inventory has been falling since mid March, and has crossed the 2006 level at 14,485:
This MLS inventory drop seems to be a nationwide occurrence, but there are reasons to believe that the MLS (and the NAR stats by extension) no longer represent a complete enough picture of the market.
Last year, I posted a comparison of REO listed for sale on Countrywide's web site with the MLS. Now that foreclosures are dominating the real estate story, the shadow inventory meme is catching fire. (Both Mr. Mortgage and Mike Morgan have recent commentaries on the topic.)
At this point, it is very difficult to piece together a complete picture of this shadow inventory, but the preliminary examinations I've been able to make seem to reconfirm the conclusion I drew last year: the banks have far more inventory on their books than they are actively marketing. Countrywide has 330 Sacramento area REOs on its site for a total asking price of $66,539,243. However, only 136 are listed in the MLS! I'll be digging into this data a little deeper later in the week.
As for the rest of the data, I think incessant_din said it best in the comments:
What I see is that the inventory is stable, but the SIT portion is stable and huge. Most stats seem to be stable, which might well be an inflection point or a bottom (or top, depending on your POV). If I were an investor, I would wait a couple of months to get a direction on the market. A flat market makes it hard to make money.