Housing Inventory Spikes! Demand at 11-Year Low.
Just a quick bit of news, prompted by a phone call from an old friend. Thanks, Tom.
Going largely unreported, inventories of homes have continued to sky-rocket with the month-over-month increase in inventory of an amazing 11.8% between the end of February and the end of March. 11.8%! If that rate holds, we will see inventories double from their current levels by Aug, 30.
Also going unreported, is the fact that at the end of March this year, we had more homes for sale than we did at the end of May of last year where we are generally well into the selling season. Clearly, the intelligent bearish sellers are trying to beat the Summer rush, beating their neighbors to the punch.
On the flip side, Lansner is reporting on his blog that home sales are at their slowest rate in 11 years here in OC. Clearly, buyers are utterly rejecting the absurd prices asked for by sellers and are waiting until the inventory situation comes to a head before considering buying.
Supply is up; demand is down. Prices are certain to fall. Readers, today may be the worst time in recent economic history to buy a house. Do not even consider buying a house today, unless you can get it a tremendous discount, say ~30% from last year's comps.
Vivo los Osos!
3 comments:
I wonder how much longer before the numbers get worse than the last downturn. I keep seeing stats which are described as the "worst since 199x". How long before one of these indicators breaks-out and shoots for a US record?
Fliptrack,
I think that's a great question. To be candid, I can't decide one way or another whether or not this downturn will be as bad as the last. Just can't seem to wrap my head around all the layers of variables.
For now, my guess that this downturn will be similar to the last: 30% price declines over several years. Could be faster, could be slower, I just don't know.
We are at mid 2006 (end of June) inventory levels and its only early April and the sales pace is down dramatically from 2006. If you look closely prices are already at end of 2004 numbers and heading down.
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