Inventory is down... what does that mean? I'm not sure I know. Over the last several months, inventory of the REO's has been dwindling. Buyers are competitivly bidding on them driving the prices up well over asking price in some circumstances.
The only explanation I was given from one of the banks I work closely with is that they are trying to work more with the homeowners as far as loan modification etc... I hope that is a good thing and not just putting off the foreclosure into the future.
Recent changes have also prolonged the eviction process which could be why homes are taking longer to hit the market. Whatever the reason, I think it is all just a temporary lull in the market. The deals are out there, I felt we had hit rock bottom a while ago however certain markets are just now feeling the brunt of it including the one million plus luxury home market. Lack of buyers for this type of home have driven the prices down. We are also starting to see the effects on the commercial market, due to the difficulties in finding tenants.