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Three Cents Worth: Inventory Is Rising, Just Not Enough

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

I took a look at Manhattan's climb out of the depths of the inventory void, and things are changing, but at a glacial pace. On a monthly basis, inventory bottomed last August (but it boomed in the fourth quarter on a quarterly basis). Perhaps the only significant reason inventory has begun to rise is because housing prices are beginning to ramp up, and sales are below last year's pace. Sellers with new found equity have begun to list their properties. However, rising inventory remains inadequate against demand and the imbalance between supply and demand remains significant—and forget about the new development boom, that's not going to help the overall market. The above chart shows a long view of the monthly Manhattan co-op and condo peak and trough and provides context on how low current supply actually is.

To provide more context, I also looked at the month-over-month change in inventory between March and April since 2001. The 13.8 percent jump in 2014 inventory from March to April represents the largest percentage jump in a decade, but the market is merely trying to play catch-up. Looking back at 2004 and 2008 bracketing 2014, those were periods with significant price growth.

Tight credit and the fact that mortgage interest rates have settled down to last summer's levels will probably keep inventory growth slow (hint: the U.S. economy sucks, so credit will remain tight for a while).
· Miller Samuel [official]
· All Three Cents Worth [Curbed]