Chart of the Day: Shadow Inventory No More in the Central Valley?

July 21, 2010

by Scott Sambucci


At the height of the 2008 sub-prime crash, housing inventory accumulated rapidly, then dissipated through mid-2009 – the effect of withdrawn listings in 2008 and the housing stimulus in 2009.  But, inventory is persistently rising again this year.  Out of the last year’s short-term recovery and back into burst for these markets?  (If you think this is interesting, you should see the price trends in the markets…)

Year-over-Year Resell Inventory in Sacramento, Stockton, Modesto & Fresno

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Mark Jacobs July 22, 2010 at 12:07 am

Great Post. Loved the information…

Miami Condo Shop July 22, 2010 at 4:20 pm

Ominous figures, I hope the situation there returns to normal and does not spread like bushfire and wreak havoc on the entire industry…

Robert F. July 22, 2010 at 5:02 pm

In general are price and inventory inversely correlated? That seems to make sense to me intuitively, but I'm no expert.

Scott Sambucci July 22, 2010 at 10:36 pm

Hi Robert – Yep, Inventory puts downward pressure on prices over time. This usually takes anywhere from 3-12 months (and sometimes longer) once you account for seasonality (Spring is a better time to sell, so higher inventory in the short term is often met with higher prices…). This inverse correlation is one of the reasons our real-time look at the market each week is valuable – looking at inventory trends now provides visibility to where prices are going in 2011.

homes in chicago July 23, 2010 at 6:46 am

Happy to see the market price trends steadily increasing again. Good that inventory rising this year when compared to the other previous ones. Nice sharing the graph.

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