These comments are made in relation to the Market Condition Graphs for May 2009. 

 SUPPLY (LISTED): Supply off approximately 234 units from last report (May 2009) and confirms a continued trend. The continuance of this trend of diminishing supply is consistent with a tendency that favors price stabilization subject to any unusual increase in the inventory level.

 DEMAND (CLOSED PER MONTH): Up again about 103 units from May. This is also a continuation of a strengthening of the market from the perspective of the seller.

 FAILURES: Failure frequency declined 97 units from May.

 SALE PENDING (FUTURE CLOSINGS): off slightly at 63 units as compared to May.  This warrants watching over the next two months.

 PERCENT SELLING: The consequence of increasing demand and declining failures is an increase in Percent Selling. Percent selling increased to 67% from May’s 58%.

 MONTHS SUPPLY: Continues to tighten (3.1 to 2.4 months) due to decline in supply and increase in demand. The magnitude and persistence of these changes implies the underlying supply/demand realities are being meaningfully affected.

 MARKET SPEED: Significant jump in Market Speed (82) signals and supports the notion of market transition. As is usual, the surge in speed favors relatively lower priced properties and REO.

PRICES: List price increasing to $135K is reflective of the season, multiple offers and lower inventory.   Pending price of properties in escrow is greater than current closing price. These price indicators are signaling proximity to or approach to market bottom. May median closing outcome was $105K (this may signal market bottom). Currently, there are about 724 bank owned properties in The High Desert, down from about 2300 at the beginning of the year.  See from the “Market History by Month” table that REO properties continue to overwhelm their competition. Notice the low incidence of short and other sales. However, the current Months Supply situation may bring a halt to continued large scale price erosion. Expect declines in price to slow (not stop) as demand and supply tighten, especially in the lower price range.

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