Inman News is reporting that a slowdown in banks initiating foreclosure proceedings in five of the states hit hardest in the housing decline may be leading to falling inventories.
In Arizona, foreclosure filings were down 6.5 percent from April to May, to 6,066, a 34.3 percent decline from a year ago.
Sales to third parties were up 4.7 percent from April, to 1,753 — a 52.3 percent increase from a year ago. Banks repossessed 4,244 homes, a 9.5 percent drop from April and a 13.7 percent decline from a year ago, and foreclosure cancellations (4,516) exceeded repossessions for the first time since November.
Foreclosure radar estimated that a notice of trustee sale had been filed on 43,268 Arizona homes in May, down 7.9 percent from April and 28.3 percent from a year ago.
Here was an interview I did with Inman news earlier this year.
Why Is Declining Inventory Important?
Many, many people I talk to have a view of the economics of the housing market that is totally disconnected for the basic principles of supply and demand. Housing is not some voodoo market that operates in a bubble outside of the burdens of supply and demand it’s driven in exactly the same way as any market would be. When there are more foreclosed on the market, there are more homes for sale than there are buyers and the prices fall.
What does this mean for me?
In simplest terms if the supply goes down and demand remains the same the price will naturally move up. More buyers will try to buy fewer homes.
Rising home prices tend to help people who already have a house that is currently less than they paid for it. Once their home rises closer to the amount they paid for it that offers the chance to refinance at todays low rates.
People who do not currently own their own home as supply contracts will be more motivated to make a purchase. Many people have waited out the crisis before buying. Now may be the time to buy as the combination of lower home prices and historically low interest rates makes it as affordable as it’s been in many years.