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Tuesday, December 06, 2011

Existing Home Inventory declines 17.5% year-over-year in early December

by Calculated Risk on 12/06/2011 08:58:00 AM

Another update: I've been using inventory numbers from HousingTracker / DeptofNumbers to track changes in inventory. Tom Lawler mentioned this back in June (Tom also discussed how the NAR estimates existing home inventory - they don't aggregate data from local boards!)

In the near future, the NAR is expected to release revisions for their existing home sales and inventory numbers for the last few years. The sales and inventory revisions will be down (the NAR has pre-announced this).

Using the for monthly inventory (54 metro areas), it appears inventory will be below the December 2005 levels this month. Unfortunately the deptofnumbers only started tracking inventory in April 2006.

NAR adjusted using Existing Home InventoryClick on graph for larger image.

This graph shows the NAR estimate of existing home inventory through October (left axis) and an adjusted inventory using the data for the last few years.

HousingTracker is reporting that inventory in the 54 metro area is down 17.5% from the same week in 2010. If this adjustment is close, existing home inventory is now below the levels of late 2005 - and that is when inventory started rising sharply.

This is just "visible inventory" (inventory listed for sales). There is a large percentage of distressed inventory, and various categories of "shadow inventory" too, but visible inventory has clearly declined in many areas.

In a previous post, I used this data to estimate the coming NAR downward revision for sales, see: A few comments on the expected NAR existing home sales revisions. Here is a repeat of the table:

Here is what the adjustment to the NAR sales would look like using the HousingTracker data (this is NOT the NAR adjustment):

YearSales, as ReportedYoY Change, as ReportedAdjustmentSales, AdjustedYoY Change, Adjusted
1An example of adjustment, this is NOT the NAR adjustment, 2estimate for 2011

Hopefully the revisions will be released soon.