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Well, here is another graph showing the total MLS listings for today in the VREB area. It would be interesting to see what would happen to this chart if all the private MLS listings were added to the mix, but at this point we are seeing equilibrium. Total units in some segments have gone down a bit, while in others they are unchanged or have gone up. This leads me to believe there is either a high rate of churn this month - ie sellers are buying at the time they sell, or else maybe not so much is happening, since the unit counts are remaining pretty consistent. Extrapolating from this, I would expect to see a big drop in total sales in the September numbers, but not much of a jump in total inventory, but we will have to wait and see.

What do I look at this chart for? Well, it is easy to produce. At the bottom, it is capturing units like mobile homes and quarter shares of recreational properties. In the top price ranges, it is capturing Uplands bungalows (just kidding, sort of). Anyway, I f prices start to go down I would expect to see the number of units competing in particular price ranges increase.

Interestingly, the area with the most units available, even in an area where many homeowners are "equity rich", is one skirting what will have to be considered, for lack of a better term, "first time buyer" affordable - from $200,000 to $400,000. If there is an affordability crisis which is going to impact the local market, you would expect it to show up here with a gradual increase of units available. You would also tend to expect the segments above to shrink eventually as a glut of homeowners tries to compete for first time buyer dollars to facilitate their own upgrades into other price brackets.

However, from what we are seeing in the US, it could take sellers well over a year to capitulate on even 10% of the perceived values of their homes, so until we see big bumps in the price ranges from $400,000 to $700,000, I don't expect this to be happening. In other words, the larger the numbers of units that turn up in the lower price ranges unsold, the more pressure will be exerted on the upper ranges to lower.

The types of properties in question are somewhat immaterial, the main point being when upsizing people sell condos, townhouses or small homes to buy bigger homes.

While I still think we may have reached the top this summer, I am less optimistic about prices reversing quickly by next spring, as the inventory has not built up this year as I was expecting. When the top was reached in the US in late summer 2005, the market and mainstream media there went through a year of denail in 2006 before things got ugly in 2007.

The only thing that could really change this here, leaving affordability aside, is an absence of buyers. Did everybody buy this year? Are there any rich Albertans or Kuwaiti Oil Sheiks left? What about potential interest rate hikes going forward?

Stay tuned.