Saturday, September 8, 2012

Like sand through the hourglass... the fall listings watch begins.

Besides the dismal sales numbers from August (and the debate over whether or not the trend will continue into Fall) the hot topic du jour is inventory.

July and August are typical months where inventory drops off sharply. This summer there was a drop but it was no where near as large as the typical summer.

Total inventory dropped -110 on August 1st (as July's numbers came in) and -606 on September 4th (as August numbers came in)

Normally, after the summer lull,  listings really start to pick up in September and sales remain constant through September with what they were in July/August.

But will the a new pattern play out in Autumn as it did in Summer?

Since there wasn't a huge drop off in listings over July/August... does that mean there won't be a typeical listings surge in Fall because all those listings are already on the market?

Yesterday we brought you the latest musing from realtor Andrew Hasman. Hasman had the following thoughts on the Fall listings question:
August was stable compared to July in that the supply of houses relative the the actual sales remained fairly stable... Another interesting statistic is the drop in supply from Aug 31st to Sept 1st of approximately 60 houses. For the first time in several months we have under 1000 houses for sale but I predict this number to quickly move up as more homes enter the market in time for the Fall.
Hasman may be proved right when he predicts listings will "quickly move up as more homes enter the market in time for the Fall." Since the big month-end drop we saw on the first sales day of September (-606), total inventory has surged a stunning 414 in just four days.

If we were to maintain this pace all month, the market would add another 1,552 listings to the total and the month would end +1,967 making September the 2nd biggest gain of the year after January.

But not everyone shares Hasman's optimistic appraisal of the inventory situation.

Realtor Rob Chipman has a different prognostication. He predicts that inventory has peaked in the Lower Mainland and that an inventory decline has begun.
Inventory in the Lower Mainland real estate market has decisively peaked, and the decline has begun... 2012 inventory took off in January, and eventually exceeded the levels seen in 2010, and almost eclipsed the swollen inventory numbers of 2008.

Both years led to drops in prices, with 2008 being the worse of the two. There were fears/hopes among some that this year’s ballooning inventory would spell the end of our decade plus trend of climbing prices and result in a marked price decrease and a prolonged period of falling prices.

I was of the opinion that this would not occur. in fact, I suspected that the new trend would be a more or less stagnant market with prices moving with a 10%-15% trading band for the foreseeable future
Chipman's contribution abruptly ends there but he is clear in his belief that Inventory will now decline and prices will stagnate without dropping significantly.

Interestingly we continue to sit on an all time record streak of 18 consecutive days with daily sales totalling less than 100 per day - despite the fact this is the week after a three day long weekend when normally we see a bump in sales from the longer non-reporting weekend sales.

Are all the potential listings that would have come on the market, already listed?

Will others pull their listings as some sellers prepare to ride out this period of stagnation?

Or will this week's listings surge continue?

The developing saga is better than any soap opera.


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  1. If listings keep up at the pace they were last week, we would hit 20,000 on the last day of the month.

  2. Based on strong increase the first 4 days of September, Chipman's prediction is wrong.

  3. Prices never stagnate; they are either rising or dropping. Whether interest rates increase, or banking regs change, or some other events occur, it will all have an effect on prices. Nothing operates in a vacuum.