New figures out today find that the REO saturation rate in the region is a little more than 30%…well above the national average of 22%.
Alex Villacorta is with the real estate research firm Clear Capital, which released the numbers. He says as the number of REO's is expected to stay fairly high locally.
"That's certainly going to add more negative pressure for prices to compete with those REO listings. And that's going to happen for some years to come just because of the volume. There's been a lot of talk about shadow inventory. But we do not expect a large flood of these REO listings to come on the market all at one time."
Villacorta says that's because flooding the market would drive down prices which wouldn't help the banks or anyone else.
The Sacramento area's REO saturation has actually been decreasing. It peaked out at around 60% in the first part of 2009. Villacorta says that's a good sign. It means people are buying a lot of the distressed inventory.