MLS Inventory "Not a Realistic Picture of the Market"

From the Sacramento Bee:

The number of for-sale signs in El Dorado, Placer, Sacramento and Yolo counties fell in September to a 19-month low of 11,022, Sacramento property researcher TrendGraphix reported [pdf] Monday. The newest tally is down from 11,369 in August – and off sharply from a record high of 16,081 homes for sale in September 2007.

From the Sacramento Business Journal:

[T]here might not be a quick end to those foreclosures, said Mike Lyon, chief executive at Lyon Real Estate. He offered a grim forecast that foreclosed homes might clog the market for an additional four years, a result of adjustable-rate mortgages resetting at much higher rates, further erosion of homeowners’ equity and surrenders by “early adopter” investors who have bought within the past year.

He said at current buying levels there’s about an eight-month supply of owner-occupied resale homes on the market, while there’s less than a two-month supply of bank-owned homes listed. That doesn’t tell the entire story, however, as there’s a large backlog of foreclosed homes that haven’t yet been put to market, he said. So while the inventory of homes for sale is down compared with last year, it’s not a realistic picture of the market.

From the Sacramento Bee:

[Robert] Shiller offers no sunny forecast. The Yale finance professor, and creator of the Case-Shiller Index that tracks home prices, says the subprime crisis that appeared last year may be "the first act of a long and complex tragedy." "We may well experience several years of a bad economy, as occurred, for example, after the profligate mortgage lending booms in both Sweden and Mexico in the early 1990s," Shiller writes. "There could even be another 'lost decade,' like that suffered by Mexico in the 1980s after its spending spree during the oil price boom, or by Japan in the 1990s after the bursting of the 1980s bubble in its stock and housing markets."
...
[Shiller:] I think we've learned some very elementary lessons. Don't think that because something didn't happen for the last 30 years it won't happen. It's amazing how people thought home prices can only go up. One thing people haven't learned very well is home prices can stay down for 30 years, too. I'm not saying it will. It certainly can happen. Most people still think this is just a temporary interruption and real estate prices are going to soar soon. The real estate market is not cheap yet. It's not to where this bubble started (in late 1998).
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[Shiller's] book is at its best when explaining how so few in authority imagined what has come to pass. Schiller says they were filled with same housing boom faith held by the public.

From Florida Today:

"I wish I wasn't upside-down on my house. But I am," said economist Sean Snaith, who bought his Orlando-area home in 2006 when he joined the University of Central Florida faculty as director of the Institute for Economic Competitiveness. "But I'm fine. I'm not going anywhere."

From the Mercury News:

Dave Cantrell considered loading the U-Haul in the middle of the night and leaving while his neighbors were asleep. He couldn't bear to face them. He had become a community leader here, rallying his neighbors to stand up to the builder that was planning to auction off one-third of their new Paseo West subdivision at 40 percent discounts.
...
As much as he worried about his neighbors, Cantrell never thought he would become a casualty of the housing crunch. He was a retired Navy man with a solid pension. He had a job in construction management and, with his impressive work ethic, was making $250,000 a year, plus a hefty bonus. His credit rating was in the 700s. So in 2006, he bought a $670,000 house, then spent $100,000 to add a pool and miniature golf course in the back. It seemed sensible enough at the time.
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In March, just five months after the auction, he lost his construction job. He kept up his mortgage payments for a couple of months, but it became obvious that no matter how many résumés he sent out, he wasn't getting any offers. He stopped paying his mortgage and he and his wife, Darleada, moved north...His grown daughter and son-in-law, who live in the tiny town of Seabeck, Wash., took them in. The Cantrells have been married for 34 years and now live in the one-bedroom, 985-square-foot apartment over a garage. He hasn't lived this way since he was a teenager.