by Bill McBride on 3/04/2013 03:24:00 PM
Monday, March 04, 2013
Dude, Where's my inventory?
Weekly Update: One of key questions for 2013 is Will Housing inventory bottom this year?. Since this is a very important question, I'll be tracking inventory weekly for the next few months.
If inventory does bottom, we probably will not know for sure until late in the year. In normal times, there is a clear seasonal pattern for inventory, with the low point for inventory in late December or early January, and then peaking in mid-to-late summer.
The NAR data is monthly and released with a lag. However Ben at Housing Tracker (Department of Numbers) kindly sent me some weekly inventory data for the last several years. This is displayed on the graph below as a percentage change from the first week of the year.
In 2010 (blue), inventory followed the normal seasonal pattern, however in 2011 and 2012, there was only a small increase in inventory early in the year, followed by a sharp decline for the rest of the year.
So far - through early March - it appears inventory is increasing at a sluggish rate. Housing Tracker reports inventory is down -23.2% compared to the same week in 2012 - still falling fast year-over-year.
Click on graph for larger image.
Note: the data is a little weird for early 2011 (spikes down briefly).
The key will be to see how much inventory increases over the next few months. In 2010, inventory was up 8% by early March, and up 15% by the end of March.
For 2011 and 2012, inventory only increased about 5% at the peak and then declined for the remainder of the year.
So far in 2013, inventory is only up 3.4%. If inventory doesn't increase more soon, then the bottom for inventory might not be until 2014.