I always find that the most intriguing nuggets from the monthly Realtors report come not in the headline numbers but the historical analysis section. Today the NAR’s chief economist Lawrence Yun noted that the current sales pace is down to where it was 12 years ago, but there are 35 million more Americans today than there were 12 years ago. The logical conclusion would be that there is pent up demand out there, and maybe there is, but all those people who are not buying houses are not renting houses either. Yun says rental demand is not picking up.

That means people are living in a more “crowded” manner.

Younger potential home buyers may be living with friends or going back home to live with family. The first time home buyer tax credit from the Obama stimulus package ($8000 that you don’t have to pay back) could help get some of these buyers off the fence, but if they’re not even renting, you have to wonder if they’re going to jump headlong into buying.

Another interesting tidbit: Distressed homes (that is bank-owned homes or short sales) made up 45 percent of total existing home sales in January. Okay, we knew that, but what I did not know is that distressed homes only make up 25 percent of the current inventory. Essentially that means a hugely disproportionate amount of home buyers are going after distressed properties. These may be regular buyers looking for a bargain or investors, who are slowly but surely getting back into the market.

Mr. Yun also noted that inventory, in real numbers, not month’s supply, bumped down 2.7 percent in January to 3.6 million homes for sale. That should be good news, since inventory is way too high and putting even more downward pressure on prices. But traditionally inventory rises in January, as most sellers stay away from the holiday season and wait to put their homes up for sale in January. Since we did not see the usual bump up in properties for sale, we can only extrapolate that we won’t see the usual bump up in the traditionally hot spring season either.

Finally, I asked Mr. Yun about the much talked about “shadow inventory,” that is homes that the banks are holding on to or auctioning off, and therefore don’t show up on the MLS and are not counted by the Realtors.

“We have heard where the banks are mysteriously holding on to the properties for a few additional months rather than directly releasing them on to the market and it’s unclear as to why that is the case,” said Yun.

He suggested it could be because the banks don’t want to take the losses on their books, but banks actually have to take the write-downs when the purchase the homes in foreclosure as REO’s. They would have to take additional write-downs if they sold them for less than the foreclosure purchase value, and that may be part of it, but those write-downs would be smaller.

It may just be that banks are totally backlogged with these properties. Realtors don’t want to take on REO listings because they’re a lot harder to sell and can take longer. In any case, there are more homes out there, empty, in need of a buyer, than the Realtors can count.

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