Inventory Levels



Each data point is the number of homes available for sale at the beginning of the month.

In a normal, healthy market we see seasonal fluctuations with inventory - the peak inventory months being spring when most sellers bring their homes onto the market. Then inventory levels drop slightly in summer when homes are selling, but fewer homes come onto the market. The levels increase again in autumn when buyer and seller activity increases. In winter levels drop off when sellers take their homes off the market for winter and buyer activity eases when both buyers and sellers start thinking about holidays and less about selling or buying a home. So, in a 'normal 'healthy' market we should see 'ups and downs' of inventory levels that correspond to a season of the year.        

If seasonal fluctuations are not obvious then what we are seeing is an 'unhealthy' market where foreclosures and short sales have cluttered and hidden the normal trends of the market. Price trends can be learnt from inventory level data – in a 'healthy' market with demand greater than supply, prices tend to move up. In an 'unhealthy' market where supply far outstrips demand then the trend on prices is down. This follows the normal Supply and Demand market dynamics.

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