What happened was that many listings were set to expire on 12-31-07 and they have not been renewed (I was waiting to see if any had been relisted, but as of today we still have only 424 listings). And this decrease was not a result of a buying spree over New Year's. The only other time in the last 5 New Year's Eves that this has happened was '04/'05 when inventory dropped 8% but climbed back up within one month.
What this is doing is weeding out the non-committed sellers; "Oh well, my condo didn't sell, so we'll just let it expire and wait until the market gets better." This will help simplify choices for buyers.
The chart above include what I like to call the pink stale market indicator line. Hot markets usually clear out inventory and slow markets have lots of inventory that sit on the market for a long time. This quick clearing of some of our inventory may help quicken things up. BUT the whole credit crunch phenomenon is a new dynamic that has shrunk the pool of prospective buyers this time around. Sellers need to know that their target market has dwindled because buyers' lenders are requiring more documentation of income and more money down (i.e. 40% down payment for the new Westin Monache!)The good news for sellers is that there is recent evidence of pent-up demand for Mammoth real estate. I listed a foreclosure (see MammothLakesForeclosures.com) last Friday and had 5 offers by Monday morning with 4 more on the way before the bank accepted one of the offers. An associate of mine also listed a foreclosure last week and put it into escrow on Monday. The interest generated by these two listings was encouraging. The prices were good on these listings, but they were not given away by the banks for pennies. I think these foreclosures and other recent distress sales are slowly showing sellers where their prices need to be in order to sell. Whether they heed this downward price pressure or just let their listings expire without selling is telling of just how motivated they truly are. -DC
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