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Three Cents Worth: Inventory Rising At Fastest Pace in 4 Years

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[This week, real estate appraiser, Curbed graph guru, blogger, and podcaster Jonathan Miller examines the state of Manhattan inventory.]

After an insanely chaotic and active 2013, it's probably time to think about how 2014 is shaping up inventory-wise. At the end of last year, I was of the opinion that listing inventory was at or near a bottom and we would see some increase in supply but not nearly enough to match demand. And so far that has been the story. In this week's column, I took a look at the first eight weeks of each year going back to 2009. Inventory always rises at the beginning of the year as sellers anticipate the spring market and skip over the December doldrums. I'd go back further in time, but I only began tracking inventory on a weekly basis in addition to monthly right after Lehman collapsed (I had more time on my hands). This analysis looks at overall Manhattan inventory at all price points—clearly there are nuances not reflected, i.e. luxury listings at historical averages while the remainder at chronic lows, so relax.

This week's chart is a two-fer. On the left I look at total inventory and on the right I look at the change in inventory, both over the first 8 weeks. They show that the number of available inventory has jumped at the fastest pace four years but there remains an incredible dearth of supply.

TOTAL Inventory in First 8 Weeks (Left Chart): Total inventory is less than half of what it was in 2009 when the post-Lehman market paused and inventory piled up. Manic highs and lows in short period of time. It's interesting that there were three distinct periods of supply during this period, almost like steps rather than a long gradual decline as demand improved. Bloated levels in 2009, historically average levels in 2010-2012, and chronic lows in 2013 and 2014. After flatlining in 2013, it looks like we are seeing a noticeable uptick in 2014. However ,relative to the overall market, the gain is small. But hey, it's a start.

CHANGE in Inventory in First 8 Weeks (Right Chart): I think of this chart as a "zoom in" of the chart on the left. By looking at the growth in supply over the first eight weeks of each year, you can get a sense of where supply is headed for the year. Clearly there is an uptick in supply suggesting that inventory has bottomed but it clearly doesn't imply there will be enough to meet demand in 2014.
· Miller Samuel [official]
· All Three Cents Worth [Curbed]