Not just leading, but dominating the race to increase inventory the fastest.
I am now predicting month over month double digit increases in housing supply for each of the next 4 months, followed by a return to a normal market where supply increases by 5% a month forever.
Actually, it's not just a prediction, but I think some scientific law about how free markets behave when influenced by housing.
As someone who will probably be looking to pick up a modest house in 2010, I say "bring on the inventory explosion".
Maybe I can buy one of the RCG posters' "investments" at $0.75 on the dollar in 2010
Meanwhile, I'm about to sign a new apartment lease, with the expectation of a supply- and interest-rate led decline in used house prices over the next 12-24 months.
I am now predicting month over month double digit increases in housing supply for each of the next 4 months
note: all numbers in this post refer to King County SFH inventory
It will be interesting to see what happens this month. From 2000 through 2004, inventory was virtually flat from June to July. In 2005, it was +4.5%. In 2006, it was +6.5%.
For this July to show a double-digit inventory increase over June would definitely be something worth noting. It would also mean a 54% YOY increase, which I suppose is certainly in line with the recent trend...
So far this month though, inventory has actually decreased, dropping from the June 30 high of 9,716 down to 9,573 as of this post [edit: according to Windermere--official NWMLS stats disagree with the 9,716 value]. I'm guessing that mostly had to do with the July 4 holiday though. I expect things to pick back up next week. We'll see.
Edit: Original numbers in the post were based on a Windermere MLS search I performed on 6/30 which showed 9,716 listings. The NWMLS data that was just released showed just 9,458 listings. Chart and numbers have been updated to reflect the "official" version of reality.
Unless invetory really drops, I expect the local media to focus on the "one month low" in 30 year fixed mortgage rates -- a drop of a whole 0.1% -- even though ARM rates went up.
Am I the only that thinks focusing on "one month low" is odd. Seems like really grasping for good news. It's like saying: "Look! Rates finally went down a little (a tenth of a percent, only for fixed rate) after going up and up! It's a great time to buy!"
Not much longer, in my opinion. I think it's going to follow the usual seasonal pattern and drop off later in the year. Exactly when, who knows... This is what happened in San Diego in 2006 (I lived there) even though extremist doom and gloomers were forecasting that inventory will go up FOREVER!
While inventory is a good measure of pricing pressure, I think months-of-inventory is much better. Having inventory go up at the same time as sales decline is double trouble and we're seeing that now. Anyone know the current months of inventory in Seattle/King County?
I believe the country as a whole is at 9.5 months of inventory right now. I'm expecting a little lower in Seattle and IMO the bulk (not all) will come from a decrease in sales. If I had to guess, I'd guess that we'll be at 8 months of inventory by the end of summer 2008.
I think the relative level of inventory growth has to start slowing soon - just based on the shear number of homes on the market. How much through record inventory can we go? Even if we go 20-30% higher than we ever have before, I would think the rate of growth has to slow. Think of it as an "S-Curve" where we have passed the second curve in the S
Just for the record. I'm not really predicting several double digit increases in inventory followed by an infinitely long period of time of 5% increases in inventory. Replace the word 'inventory' with 'price', to know who I'm actually making fun of.
Not sure if anyone was confused, but some of the posts sounded like they took me serious. Ugh! Any joke that needs explaining is sure a rotten one!
Comments
I am now predicting month over month double digit increases in housing supply for each of the next 4 months, followed by a return to a normal market where supply increases by 5% a month forever.
Actually, it's not just a prediction, but I think some scientific law about how free markets behave when influenced by housing.
It's a Man Law. Couldn't resist.
Maybe I can buy one of the RCG posters' "investments" at $0.75 on the dollar in 2010
Meanwhile, I'm about to sign a new apartment lease, with the expectation of a supply- and interest-rate led decline in used house prices over the next 12-24 months.
Go go gadget deflation!
It will be interesting to see what happens this month. From 2000 through 2004, inventory was virtually flat from June to July. In 2005, it was +4.5%. In 2006, it was +6.5%.
For this July to show a double-digit inventory increase over June would definitely be something worth noting. It would also mean a 54% YOY increase, which I suppose is certainly in line with the recent trend...
Month: YOY
Feb: 22.50%
Mar: 32.59%
Apr: 38.42%
May: 44.17%
Jun: 45.75%
So far this month though, inventory has actually decreased, dropping from the June 30 high of 9,716 down to 9,573 as of this post [edit: according to Windermere--official NWMLS stats disagree with the 9,716 value]. I'm guessing that mostly had to do with the July 4 holiday though. I expect things to pick back up next week. We'll see.
Edit: Original numbers in the post were based on a Windermere MLS search I performed on 6/30 which showed 9,716 listings. The NWMLS data that was just released showed just 9,458 listings. Chart and numbers have been updated to reflect the "official" version of reality.
Rates on 30-Year Mortgages Sink
Am I the only that thinks focusing on "one month low" is odd. Seems like really grasping for good news. It's like saying: "Look! Rates finally went down a little (a tenth of a percent, only for fixed rate) after going up and up! It's a great time to buy!"
Not much longer, in my opinion. I think it's going to follow the usual seasonal pattern and drop off later in the year. Exactly when, who knows... This is what happened in San Diego in 2006 (I lived there) even though extremist doom and gloomers were forecasting that inventory will go up FOREVER!
While inventory is a good measure of pricing pressure, I think months-of-inventory is much better. Having inventory go up at the same time as sales decline is double trouble and we're seeing that now. Anyone know the current months of inventory in Seattle/King County?
I believe the country as a whole is at 9.5 months of inventory right now. I'm expecting a little lower in Seattle and IMO the bulk (not all) will come from a decrease in sales. If I had to guess, I'd guess that we'll be at 8 months of inventory by the end of summer 2008.
I think the relative level of inventory growth has to start slowing soon - just based on the shear number of homes on the market. How much through record inventory can we go? Even if we go 20-30% higher than we ever have before, I would think the rate of growth has to slow. Think of it as an "S-Curve" where we have passed the second curve in the S
Not sure if anyone was confused, but some of the posts sounded like they took me serious. Ugh! Any joke that needs explaining is sure a rotten one!
Are you referring to me since I post at RCG?