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A Declining Inventory of Unsold Homes September 28, 2009

Posted by John Watch in AccuriZ Reports, News Feed.
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As the news of declining sales for existing homes has captured headlines as of late, the underlying highlight of a declining inventory of unsold homes is encouraging news for the housing market.  At the end of August, total housing inventory dropped 10.8% to 3.82 million existing homes for sale, representing a proposed 8.5-month supply and the lowest level seen in a year (not seasonally adjusted).  Real estate is cyclical, seasonal and emotional, so declining sales for existing homes is expected, as the seasonal cycle wraps up and the $8,000 tax credit comes to a close.  What’s more significant is the decline in housing inventory.

The Housing in Crisis report discussed the extreme oversupply of housing as a primary factor in the housing boom.  Using this report, which utilizes a 3.5 million growth rate in population at a 2.7 average unit size, 1.3 million new housing units can be absorbed annually.  This means that it will take three years for a complete housing absorption in the market.  Until this happens, property values will remain flat.

What would be interesting to know is the details of the 3.82 million existing homes on the market. Does this number include new construction?  What exactly qualifies as an existing home? Based on various reports I’ve searched, the 3.82 million represents homes available for sale which would not include new construction if true.  Regardless, this news of declining inventory is a great sign of steps in that necessary direction.  As the market corrects itself with property values, inventory and prices, a housing recovery is in place.

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Comments»

1. Posts about Real Estate Market Reports as of September 28, 2009 — Real Estate Market Reports - September 28, 2009

[…] and government notes, signaling an end to the worst financial crisis since the Great Depression. A Declining Inventory of Unsold Homes – accuriz.wordpress.com 09/28/2009 As the news of declining sales for existing homes has […]

2. Brian Holden - September 30, 2009

Just wait for the “tsunami” of Foreclosed homes presently being held by the Banks – Over 1 Million according to the experts at the recent 5 Star Default Industry Convention in Fort Worth – and maybe millions more to come.

Bruce Dowell - September 30, 2009

I’ve been hearing of this tidal wave for 5 months and I know it’s there too. In my market place we can sell everything thing they can throw at us. Any idea when it will come?


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