In most bubble markets, the spring selling season has been a disappointment for the real estate industrial complex (REIC).
Even with Bernanke's optimistic outlook, the Fed chairman did make clear once again that the painful residential real-estate bust, which started last year, "appears likely to remain a drag on economic growth for somewhat longer than previously expected,"
Inventory continues to increase in the overwhelming of the bubble markets as prices are either declining slightly or remaining flat. According to Housing Tracker inventory has increased in these metropolitan areas in the past 3 months and compared to a year ago.
- Baltimore: 31% (3 month) 30% (1 yr)
- Boise: 23% (3 month) 84% (1 yr)
- Detroit: 15% (3 month) 13% (1 yr)
- New York City: 15% (3 month) 2% (1 yr)
- Sacramento: 30% (3 month) 11% (1 yr)
- Washington: 44% (3 month) 7% (1 yr)
For example, in metro Sacramento on March 20th there were 11,560 properties which increased by 2001 (16.9%) to 13,521 on May 6th [about 1.5 months]. Meanwhile, if we compare the year over year (YoY) for sold inventory we see 2,489 properties sold in metro Sacramento in March 2006 down 7.7% from 2,965 in March 2005.
Foreclosures are also rising significantly. The Central Valley Business Times reports that "There were 176,137 foreclosure filings -- default notices, auction sale notices and bank repossessions – nationwide last month, nearly 90 percent from May 2006 and up 19 percent from the previous month, according to a monthly report from Irvine-based RealtyTrac Inc., an online marketplace for foreclosure properties."
Inventory has increased significantly this spring. With the spring coming to a close, inventories remain high in the bubble markets.
The false hope of the 'spring boom' is being shattered by the harsh reality of a declining housing market. A spring boom is a mere fantasy .