This week I took a look at the month-over-month change in listing inventory. I began tracking inventory weekly at the end of 2008 when all hell broke loose in the credit markets. To add a wrinkle to it, I looked at the market by pre-war and post-war (refers to WWII) just to see if there was any distinction between the two market segments.
A few observations!
- Pre-war apartments seem to have more extreme changes at the peaks and troughs of this limited post-Lehman world (tomorrow is the two-year anniversary of their bankruptcy). Since pre-wars are generally worth more than post-wars, all things being equal, this seems logical since the high-end of the market was hit harder in early 2009 than the post-war market.
- Pre-wars saw a sharper decline in the rate of inventory growth than post-wars as the market heated up in the second half of 2009.
- Lehman aside, the pattern could also suggest that pre-wars are absorbed later in a period of rising demand (I'm reaching here).
- The pre-war/post-war ratio is roughly 3:1 - the pre-war volatility is not attributable to a small data set.
- Pre-war inventory fell faster over the summer of 2010, just like it did in 2009.
- A very pronounced spike occurred just after Labor Day (touched on in last week's 3CW post), which is normal, and current inventory appears to be rising in anticipation of the seasonal increase in demand in the fall market.
- Inventory is volatile. Duh.