Inventory held steady on the last Saturday of the month, giving up less than 30 listings. I do expect a sharper drop next week after the expirations that took place on the first are factored in.
September usually signals the beginning of the end of the selling season, but this year has been anything but usual. Banks have become the dominant force in the marketplace, and their ability to bypass the MLS and make their own markets has made analysis difficult. I do think this is a temporary phenomenon, however. For starters, foreclosures continue to outpace sales in the Sacramento region. Secondly, there is growing evidence that property speculators are behind the recent spike in sales. This from the Mortgage Daily (via Mr. Mortgage):
M.I. Volume Sinking Fast - August 29, 2008 By Mortgage Daily staffThis backs up earlier reports of "mini-booms" taking place in busted bubble zones across the country. Banks will eventually be forced to use all the market mechanisms at their disposal in order to move inventory.
Mortgage insurance activity has fallen by half over the past year, is at its lowest level in nearly a decade and is headed lower. But as mortgage insurers tighten their guidelines, the quality of new business is likely improving.
Last month, 70,725 policies were written for $12.3 billion, the Mortgage Insurance Companies of America reported today. Activity dropped from 74,779 policies for $13.7 billion during June.
Volume was less than half the level in July 2007, when 171,585 policies were written for $26.6 billion. The latest month’s activity is the lowest since 2000.
Also, unlike other so-called "experts," I don't see anything in these or other data that suggest a "bottom" any time soon. Prices are still falling. Foreclosures continue to outpace sales. Credit is tightening. Unemployment is rising. I am not saying the bottom call will be wrong. I'm saying that they can't possibly know. Nobody knows.