The Months of Inventory as of Nov. 30 2011 was up 9% to 2.12 compared to Oct. 31st this year 1.95, but down 32% compared to Nov. of last year 3.14.  Of the 27 communities measured 19 increased in Months of Inventory and 8 decreased compared to Oct. 31st this year.  We are still at a very low level of homes for sale compared to how many have gone pending in the last 30 days.  The Months of Inventory as of Nov. 30th over the last five years 2011=2.12, 2010=3.14, 2009=1.91, 2008=4.59, 2007=13.05, & 2006=6.60. Until our weak economy picks up, unemployment starts working its way down, and consumer confidence increases, demand will remain fairly weak except for the homes priced exceptionally well even for this market.  The national unemployment rate went down for last month from 9.1% to 8.6%, but this wasn't because the job market is getting better, but because about 350,000 people dropped out of the job market, stopped looking for jobs.  Don't let this figure make you think the job picture is getting better because it isn't.  Because of our increasing population we need to add about 125,000 jobs a month nationally just to stay the same in unemployment levels. Short Sales and Foreclosures will remain a significant part of the market into the foreseeable future.  The normal sales inventory will most likely remain low as sellers are wishing for better prices in the future, but this won't happen until demands picks up.  The normal sales of homes on the market will be sellers that are highly motivated to sell so they will for the most part be competitively priced.  There are many reasons why sellers need to sale so we will see a constant adding of inventory on the market of normal sales, but nothing close to the numbers if we were in a normal market. DEFINITION: Months of Inventory it gives a snapshot of where the market is and what activity is happening on a specific day going back thirty days of Pending Sales.  It is figured by dividing Pending Sales back 30 days only into total Active Listings. Example: As of Nov. 30th Danville had 63 pending sales going back 30 days divided into 148 total active listings=2.35 Months of Inventory.  This indicates that if the rate of pending sales remains the same it would take 2.35 months to sell these 63 homes.  This simple formula can be used for as broad or as narrow of a category that you want to analyze.  Examples are by city, neighborhood, development, single family homes, town homes/condos, price range, bedroom count, number of stories, etc.  This is good information to use on a listing presentation or when your buyer or seller is considering an offer. Because so many Short Sales & Foreclosures are affecting our market we don't have a "normal market".  With a shortage of inventory this should be a strong seller's market, but as you know it isn't. Compliments of Paul Ward, Broker Associate, seven years with Keller Williams Realty, Danville

This entry was posted on Friday, December 9th, 2011 at 5:33 pm and is filed under Alamo, Blackhawk, Castro Valley, Concord, Danville, Diablo, Dublin CA, Fremont, Lafayette, Livermore, Martinez, Pleasant Hill, Pleasanton, REO, San Ramon CA, Short Sale, Walnut Creek. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.