Clay comments on another post;

If sales are down pretty much across the board, how come inventory is coming down? My guess is that many folks are pulling their listings or holding off for now, waiting for the “spring bounce.”

Initially in spring it will appear that all is well again but end up being a belly flop, as always that is just my opinion.

Can’t wait till spring…

Two things.

One, many sellers are indeed pulling their listings and of course another factor is that many have decided to rent their investment properties even with a monthly loss.

Two, and the larger factor I believe, is the huge number of investor properties that have been hitting the market each month is winding down.

A few months ago that spigot of investor homes hitting the market started to slow down. Most investor homes have already either been sold, put up for sale, leased or put up for lease.

I don’t think we will see such huge numbers of homes hitting the market each month from here on out.

Now that huge “overhang” of investor homes on the market needs to be digested by the market.

Once the market puts families into those former investor homes, the homes will stay off the market for several years lowering the supply of homes.

On the other hand, many of the investor homes bought in 2004 and 2005 popped right back onto the market leading to the large inventory we see today.

I’ll have a graph on this later this week.