Real Estate Inventory - How High Will It Go?
February 23rd, 2007: 1,609,000 Single Family Homes
May 30th, 2007: 1,924,110 Single Family Homes
Inventory Increase: 315,000 Houses
or about 100,000 per month
or 1,400 houses every day
I am overwhelmed by the continuing climb of real estate inventory. For people looking for evidence of the tail end of a housing bubble market, this should provide definitive evidence.
In late February when we started tracking the market using Hardtack, we were at 1.6 Million homes listed in the MLS. Today we at 1.9 Million homes, with the rate of growth continuing from it's inflection point March 21st. In early May it looked for a few days as if the inventory was starting to flatten out, but then arced back upwards and resumed its previous slope.
Why is this happening? Firstly, the active season for buying and selling homes is from the spring to mid summer. Part of this is so that families can re-locate and get their children in the new school district before the start of the new school year. In addition to this normal volume, there seems to be a large number of investor and speculators who are trying to sell their investment properties before the market goes any lower, or they run out of money to cover their payments are are forced to join the swelling numbers of foreclosures.
How high will it go? I suspect we will break 2 Million single family homes on the MLS inventory by the end of June, if not sooner. How the market will work through this much inventory is the big, important question for our economy.
1 comments:
Utah will be contributing to the inventory problems soon if they haven't already. I recently went golfing in an area south of Salt Lake City and I saw a ton of homes around the course that were newly built...all with for sale signs. And they were still in the process of building other new homes. Once the dust settles, the builders are going to have a lot of homes on their hands.
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