For-sale inventory has been declining and bank owned homes are coming onto the market very slowly since the end of the foreclosure moritorium. Many market participants understand that there is further inventory on the horizon and this effects current prices. But the price levels of a great number of homes on the market are very attractive to first-time buyers and investors and the mortgage payment on a bank owned home sold for say $115,000 (very common now), is just over $600 per month. This is either in line or less than many apartment rents.

As a result of these prices, along with the quality and recent age of a lot of these homes, purchasing interest has jumped and we see that show up first in contingent sales. As of the middle of May, single family home contingent sales are over 6,000.

Looking at the exhibits below, you can see clear trends in contingent, pending and closed sales. Currently, contingent and pending sales are taking up a large chunk of the listed inventory (totaling 46%).  Finally, in the last exhibit which is based on year-to-date averages, we have some indication of what we can expect in terms of sales. Of the single family homes that go into contingent status, 28% become closed sales the following month. Fifteen percent close in the second month and 6% close in the third month. Based on the number of contingent sales and their chance of closing, sales in May and June should keep up the strength of the past several months and until banks start turning out more homes for sale, the home that you were wishing would come down and price may get sold.