More hope for housing

Unsold inventory state-wide reached a five-year low in December, with the California Association of Realtors index falling to 3.8 months from 5.6 months a year earlier and 16.6 in January 2008. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate. What's significant is that the inventory is falling at all price points (though home in the $1 million+ range remain tougher sells). Multiple offers are now the norm in many locations. It's entirely possible that these inventory numbers are artificially low because so many would-be sellers are waiting for the economy to improve. And given the job numbers we posted earlier, that's a ways off. Also worth remembering: The prospect of many more foreclosures later this year, which would probably bump those inventory levels. Still, this has to be considered a hopeful sign. From the WSJ:

The current inventory rate is running well under California's historical average since the 1980s of about an eight-month supply of existing homes on the market. That's partly because a once huge supply of foreclosures in the state has dwindled. In November, foreclosed properties accounted for 40% of all single-family sales, new and used, in California, compared with 58% in January, according to the most recent estimates by Zillow.com, a market tracker. In general, California's coastal markets performed better than inland markets. In Orange County, for example, Zillow estimates foreclosures dropped by more than one half to 20.6% of all single-family sales in November from 43.5% in January. In inland Merced County, foreclosures were also down, but to 69.9% of sales from 83.4% in January, according to Zillow.

Here's the CAR release.