I posted an article recently about how I thought we had seen the worst of the real estate market here in the Salt Lake Metropolitan area.

It was based on the facts that sales volume has increased dramatically, inventory has decreased significantly.

There seems to be a vibe of confidence amongst the consumers too.

Then there’s the “What about the shadow inventory” question that keeps popping up.

I was in a meeting with a manager from a large bank and they said their bank had inventory for years to come. BUT here’s the thing.

Banks can’t or should I say won’t turn and dump all their inventory in the market. If they did they would drive prices down and actually wind up with more inventory.

There are way too many people that are not upside down, but cannot afford a hit in prices or they will be. So if the banks drove down prices all those borderline folks would walk from their loans.

So as I see it, it is in the best interest of the banks to keep a mild but steady flow into the market place.

I personally believe they will do so in a way that prices can actually move up a little to create a more comfortable margin for the borderline folks. Then keep a steady flow.

Read about the absorption rate for Salt Lake County