Dr. Housing Bubble 01/08/08

Massive Inventory Decrease in Southern California. Is This the Fabled Bottom?

I’ve been tracking the Southern California market for over a year. The inventory numbers for San Diego, Ventura, Orange, Los Angeles, San Bernardino, and Riverside Counties hit a peak in late September at 166,514. During this same time, sales for the region have steadily decreased. At a certain point, it was common to see monthly sales for the Southern California region hitting 30,000+. When we look at the current inventory number and the sharp decrease, the current inventory number for the region stands at 147,404 it looks like sales have increased; in other words since October 19,110 homes have been taken off the market either from sales or being removed from the MLS listing service. The new spin at least from some perma-housing bulls is that this decrease in inventory is a strong indicator that there are fewer homes on the market and thus, by the magic of supply and demand less homes creates higher prices and once in a lifetime buying opportunities. Let us take a longer view of homes sales data from the Southern California region:

Southern California Sales

http://www.doctorhousingbubble.com/massive-inventory-decrease-in-southern-california-is-this-the-fabled-bottom/

with no-one looking. my 2cents.

I live in a MN Seniors low income rental building in the suburbs. About 2/3 of the people have a car, usually at least 5 years old. Eventually they need a car repair and ANY repair at a shop now costs #500-700 which is probably more than their monthly income.

We now have a couple of back yard mechanics that are used because they have no overhead but they also probably do not pay into a pension other than social security for themselves. They are trying to work a job for medical insurance which does not pay the bills and make money on the side by fixing cars.

When my brother went looking for a place to rent for his software business in 1999 he mentioned that his impression was that the better buildings were all held by a "mafia" and outrageously expensive. Our genealogy society built a building in the mid 90's for that very reason. It only has gotten worse and more and more people are trying to work for themselves or speculate in rental real estate.

So the mechanic is down to $9.50 and hour but they have to charge you a $250 for the rent on the building for every car repair to make ends meet.