Back in July, 2008, I posted on the topic of variation in housing inventory. I also showed how housing inventory was radically different across cities of similar size. Later, in January, I posted on the lumpiness of housing inventory in my region of Naperville, IL.
So now, after some bounce in the economy, how does that inventory look?
Sad to say, not a lot has changed.
On the surface, it's not too bad a situation: 844 homes are for sale in the Naperville, IL area and 927 have sold year-to-date, according to data gathered by local realtors. The average time on the market of 175 days for the houses that sold suggests that inventory is not moving quickly. The average time on the market for the houses that are currently for sale is 262 days.
At present, 174 contracts are pending on home sales; those have averaged 224 days on the market.
But here's the rub: A total of 132 out of the 844 homes for sale are priced at $1,000,000 or greater. Those have been on the market for an average of well over 500 days. Only 10 of the 174 contracts pending are on homes in the $1,000,000+ range and, year-to-date, only 28 of those expensive homes have sold.
What that means is that, at the upper end, there are many years' worth of housing inventory. Little in the current economic recovery has helped this portion of the market. Indeed, given the continuing credit crunch and difficulty obtaining jumbo mortgages with anything less than 50% down, it is difficult to see what will help the upper end of the real estate market. And, if developers cannot sell these properties--many of them are new construction sitting vacant--that cannot bode well for the local and regional banks that lent money for the projects.
At the upper, upper end of the local housing spectrum, there are 23 homes on the market for $2,000,000 and up. No contracts are pending; only 1 house in this price range has sold to date. Multiply these dynamics across housing markets far more troubled than Naperville--from south Florida to Las Vegas--and you can see how talk of a housing recovery gives only a partial picture of the actual situation.