Spring has definitely sprung. I don’t know about you but a few days ago when I saw the weather report and saw an entire week of uninterrupted sunshine, my heart gave a little jump. And obviously home buyers are feeling the same way. This is the last official month of the homebuyer tax credit and tax returns are in. The real estate season seems like it’s definitely here!

It might not be time for homeowners in Sacramento or people considering selling their homes to rejoice yet, however. True, we are seeing some great news come out of foreclosure sales. In fact, over the last three months foreclosure sales are consistently at 50% of what they were a year ago at the same time. (This is of course referring to the number of sales and not real estate prices.)

Non-distressed properties are also gaining momentum in sales. Closed escrows now tell us that 1 out of every 3 sold homes is non-distressed, which means that the homeowners are not upside down in their home and they do not have to get bank approval to forgive their mortgage debt in order to sell it. That’s good news. A year ago, just 1 out of every 10 homes was in that situation. Quite a dramatic turn around.

Unfortunately, the one dark cloud in this real estate recovery is the short sale inventory. And it could just be the reason why the green shoots springing up from the ground might take a while to show the bloom of price gains. For the last three months, we have seen more than a year of short sale inventory every month. With just over 300 short sales closing escrow, the 4200 or so short sales on the market might take a while to get absorbed.

Dark cloud? Yes, definitely. The only silver lining I can see here is that based on the last year of real estate sales, we had 13.5 months of short sale inventory and based on the last six months of sales, that number of short sales has gone down to 12.7 months. It’s a beginning. Let’s hope so, anyway.

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