cheaprealty net

Here is another "months of inventory" (MOI) snapshot of the VREB area
of the MLS, based on searches of the listings April 10, 2008. Inventory has jumped since a couple days ago in the single family home segment. but in the other two segments it has actually dropped a little bit.

The trend with expensive (million dollar plus) properties not being
absorbed continues, with another 12 or so added in the last few days. There are now more than 14 months of expensive property to be absorbed on the market, which is becoming more top heavy daily.

Based on the standard 3 months of supply being the point where the market starts to shift from a seller's to a buyer's market, it is clear there is already a balanced market for single family homes, with it leaning towards a buyers market above the median. What would it take to really push things over the edge? Well, around 1600 listings would represent 4+ months of single family home supply. There have never been so many homes listed in VREB in the last few years, 1200 or so is a high water mark the last few summers, and it would take some radical developments in the short term for that to occur in the next few months - but if it does, that could be the trigger for substantial price drops.

Does it seem like that's going to happen this year? I keep thinking affordability has got to eventually squeeze out the buyers. Is that happening now? I went to a couple open houses on the weekend and there did not seem to be much happening.

Otherwise, unlike condos and townhouses, which are already oversupplied based on the months of inventory metric, the single family home market continues to stutter along. Sales in March versus listings are going to tell the tale. On PCS I see a mixed bag of price reductions and increases. $20,000 drops are not uncommon, but it seems a few places are going over by a similar amount. This is anecdotal, and not a statistical observation, of course. If another 500 unabsorbed listings come on the market in the next few months, things could get interesting.