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Three Cents Worth: Inventory Not A Three-Year Cycle!

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[This week, podcaster and Curbed graph guru Jonathan Miller lays waste to your puny inventory expectations.]

This week I presented inventory levels by month for each year since 2001, when I began tracking this metric on a monthly basis. For May ‘09 I used last Friday’s totals and projected the month-end numbers for June 2009. I really wanted to focus specifically on the spring/early summer market of each year because that’s were the heaviest concentration of sales activity and price appreciation tends to occur. I get the sense that many were counting on the spring to make everything right with the housing world.

Inventory tends to move in the opposite direction of sales activity with new development as the wild card. More inventory = less sales. I wish I had monthly inventory going back as far as my sales data (25+ years) to better explore inventory patterns because the current chart suggests three-year cycles (peak: 2003, 2006, 2009) and inventory will top out this year.


The idea that inventory will peak this year doesn’t make sense, since shadow inventory is missing from the equation, unemployment is expected to trend higher over the next 18 months, the economy is still in recession and the near-term Wall Street outlook remains a question mark.

Shadows aside, I was surprised at how close these four months track in unison, how uniform the peaks and valleys were and the general upward trend of inventory over the past decade during this period of the year, for what that’s worth.

The trend is your friend...until it ends.
· Available Property During Spring Market: Manhattan Co-op, Condo & Townhouse Monthly Inventory [Miller Samuel]
· Previous Three Cents Worth [Curbed]