This week, I dusted off a chart I've shared in the past but made a few modifications. It provides some context to the current inventory situation on a month by month basis. I've presented the trends here since the collapse of Lehman, but it is is based on the data series I began collecting in 2000. I inserted the red glowing line to reflect the monthly averages since 2000.
March of 2009 was the high water mark of the 13 year series, and this past August was the trough. Inventory bottoms each August and peaks annually (until the past few years) in the fall rather than the spring.
I suspect overall inventory has finally bottomed, but I would not expect a rapid ascent anytime soon. I think the pace of sales activity will fall over the next year which will allow inventory to expand. This year saw record or near record sales volumea result of the combination of both rising rates pulling people in and a release of pent-up demand leading up to the fiscal cliff last year. Activity has cooled down this fall so it would be reasonable to see inventory begin to rise next year (with seasonal trends still in tact). Right now inventory is generally heavier at the top than the middle or bottom of the market (a future topic for 3CW).
· Miller Samuel [official]
· All Three Cents Worth [Curbed]