Overall housing inventory is not low, but the inventory available at prices buyers can afford is artificially low.
Starting in late 2008, lenders began deferring foreclosures to stem the tide of REO flooding the housing market during a time when buyers were few and far between. This slowed the rate of decline in home prices, but it didn't reverse the downward momentum. Starting in 2011, lenders made significant changes to their loss mitigation procedures. They dramatically slowed the processing of foreclosures, aggressively modified delinquent mortgages, and they stopped approving short sales, particularly if the borrower had assets. As a direct result of these policies MLS inventory plummeted, and remaining homes for sale weren't the must-sell inventory that plagued the market from 2008-2011, the remaining homes were can't sell cloud inventory, suspended at prices buyers can't afford. Any cloud inventory that appeared on[READ MORE]