The World Turns On, But Inventory Does Not

CoreLogic is a company that tracks all kinds of trends.

They take a slice of recent history and the economic factors within it and do cool calculations that slice and dice information used by pundits and prognosticators – and sometimes speculators.

Data is only as good as its interpretation.  What is even more important is the actions that are taken by such interpretations.

You might be asking yourself what is the point behind all of this.  If you are in the housing industry in any way, it is quite meaningful.

You see, CoreLogic just released a report about inventory turns on foreclosures that hit the market in 2007.  You know, that time before the market crash of 2008.

There were over 23,000 foreclosures in 2006 that sat in REO inventory until 2010.  This number represents about 10% of the total number of foreclosures that hit that same year.

Now, we are about to have another 10 million homes hit the market in 2012 and 2013.  If history is any indicator, over 1 million of these homes will still be in the inventory until 2016 / 17.  So what, you say?

Well, 1 million is a long way from 23K.  Couple this with the radically changed credit accessibility of the general public and Dodd/Frank, and you have a very big recipe for protracted affects on home prices and selling cycles.

On the other hand, it does represent some great opportunity if you are of a mind to do so.

What we can be assured of is that home appreciation will be very low for several years to come, but the rental market will be quite hot.

Just make sure that if you plan to be in the speculation game any time soon, plan to be in it for the long haul…

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