Tuesday, March 23, 2010

More on Existing Home Sales and Inventory

by Calculated Risk on 3/23/2010 11:22:00 AM

Earlier the NAR released the existing home sales data for February; here are a couple more graphs ...

Existing Home Sales NSA Click on graph for larger image in new window.

This graph shows NSA monthly existing home sales for 2005 through 2010 (see Red columns for 2010).

Sales (NSA) in February 2010 were 7.9% higher than in February 2009, and 3.2% lower than in February 2008.

We will probably see an increase in sales in May and June because of the tax credit, however I expect to see existing home sales below last year later this year.

The second graph shows the Year-over-year change in reported existing home inventory.

Year-over-year Inventory There was a rapid increase in inventory in the 2nd half of 2005 (that helped me call the peak of the bubble), and the YoY inventory has been decreasing for the last 19 months. However the YoY decline is getting smaller - even with a large reported inventory (and probably more shadow inventory). This is something to watch.

This slow decline in the inventory is especially concerning with 8.6 months of supply in February - well above normal.