Continued from page C22

reduction.

“I think part of the thing here in California is that there are already a lot of properties on banks’ books, and the fact that we’re seeing short sales increase means they are going to work down the backlog of other properties,” Sharga said. “That’s really what we’re talking about is improvement. It’s too early to say we’re in a recovery, but this is a necessary first step.”

And in coastal areas like Orange County, which have less inventory and are more sought-after, that recovery will likely come quicker inland areas, Thomas said.

“When you get on the coastal zone the markets they tend to be a lot hotter, there’s more interest, and when you have a little more demand in a place that people want to live, there is enough appreciation where values are at least stabilized,” Thomas said. “We’re finally starting to eat into that shadow inventory that’s been hanging over us for a while. If we keep on going in that direction we will be eating into the reserves, which we call the shadow inventory. We’ll be starting to see a bit of a cleansing.”

Got an interesting real estate story to tell? Email djergler@gmail.com.