Glass Half-Empty vs Glass Half-Full on Sonoma County Foreclosures

Dave Roberts has a follow-up post on his website taking another look at REO sales in Sonoma County. Head over and give it a read.

The bottom line is that REO sales have picked up and there are currently less than 140 active REO listings on the MLS. Compare that to 187 REO sales last month alone! Good news for sellers, bad news for buyers... right?

Not so fast. Take a look at the graph to the right.

It shows Sonoma County Notice of Defaults, Auctions, and REO data off ForeclosureRadar.com (in blue) and compares it to Dave's active REO listing number of less than 140 (in red).

Clearly there is more supply that is going to be hitting the market. In the last 120 days 1,546 households in Sonoma County received Notice of Defaults. Another 890 have an auction date set for the courthouse steps. Finally, Foreclosure Radar shows a total of 535 REO's in Sonoma County (if you add up Dave's Pending, Contingent, and Active REOs it gets you somewhat close to about 392... does shadow inventory account for the remaining 143?)

Whether this is a glass half-full, or glass half-empty, depends on your vantage point. As most of these NODs turn into Auctions, and Auctions turn into REOs, supply will once again ramp up and prices will continue their fall. Glass half empty for sellers, but for buyers this means more selection at lower prices.