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Three Cents Worth: Inventory Bump and Grind

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[This week, Curbed graph guru Jonathan Miller takes a look at the annual New Year's spike in inventory.]

Nearly everyone is aware that apartment inventory is higher now than last year – from February 2008 to February 2009 inventory increased 38.4% and it's now at the highest level since we began tracking it nearly a decade ago. The survey was originally a quarterly effort which morphed into monthly and, since November, weekly.

One of the quirks with Manhattan listing inventory patterns is the jump seen after the first of the year. From 2001 to 2008, monthly listing inventory increased an average of 2.2% from the last day of December until the last day of January. That’s the horizontal green bar on the chart.

With the rise in inventory and drop in sales activity to date, I was interested in seeing if the weaker market had any impact on that year end bump — how quickly did it happen this year, and were there any patterns by apartment size in the new year?

The multi-color lines represent studio through four-bedroom apartment inventory tracked weekly, and their percent change from the preceding week.

As it turns out, all apartment types followed a similar pattern — that the bump in inventory seen since 2001 also occurred in 2009. The jump began in the first week and peaked by the end of the second week, settling on a new level but clustered around the 2.2% average bump. In other words, it appears that 2009 inventory followed historical trends (admittedly eight years is limited), just at a higher level.

If seasonal patterns continue, expect inventory to continue to rise through May. Given the lower level of sales activity, I am somewhat surprised that inventory is not higher (shadow inventory discussions aside).

I would think it's attributable to more casual sellers holding off listing until the market improves, just the opposite of what happened in mid-2006 when inventory was nearly as high as it is today.
· Manhattan Co-op/Condo Weekly Listing Survey [Miller Samuel]
· Previous Three Cents Worth [Curbed]