by Calculated Risk on 4/29/2013 01:05:00 PM
Monday, April 29, 2013
Weekly Update: One of key questions for 2013 is Will Housing inventory bottom this year?. Since this is a very important question, I'm tracking inventory weekly this 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 Realtor (NAR) data is monthly and released with a lag. However Ben at Housing Tracker (Department of Numbers) has provided 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 (to normalize the data).
In 2010 (blue), inventory mostly 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.
Click on graph for larger image.
Note: the data is a little weird for early 2011 (spikes down briefly).
In 2010, inventory was up 15% by the end of March, and close to 20% by the end of April.
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 up 12.1%. This is well above the peak percentage increases for 2011 and 2012 and suggests to me that inventory is near the bottom. It is possible that inventory could bottom this year - especially if inventory is up 15% to 18% from the seasonal lows by mid-to-late summer.
It will probably be close. Inventory might have already bottomed in early 2013, or might bottom in early 2014. This will be important for price increases ... once inventory starts to increase (more than seasonal), buyer urgency will wane, and I expect price increases will slow.