Now that we’ve gotten the Q3 reports from Fannie, Freddie and the FHA, the picture of housing’s future is becoming ever clearer.
The combined Real Estate Owned (REO) inventory of the three rose 24 percent quarter to quarter and 93 percent year over year.
In real numbers, at the end of Q3 there were a record 293,171 REO’s sitting on their books. This of course doesn’t count REO held by the banks and private label securities. That’s up from 153,007 at the end of Q3 2009.
Granted, the GSE’s and FHA have disposed of (sold) an awful lot of properties. In the first 9 months of this year they’ve sold over 200,000, but that still leaves us, net, with the above numbers, which are also rising at a fast clip.
So why am I bombarding you with all these numbers? Because as I have always said, over and over, housing’s recovery is based almost entirely on inventory.
We can talk prices, affordability, confidence, foreclosures, scandals, politics, whatever you want, but in the end it comes down to supply and demand.
We are looking at a ballooning supply coupled with dwindling demand. You do the math.