sdrealtor, you’re making a mountain out of a molehill. What powayseller said was innocuous and did not minimize Rich’s work. Rich reported inventory and powayseller just pointed out that inventory declines in the fall.

Rich’s work started with the words,
“It definitely appears that inventory has peaked for the year”

Key words …
for the year

IMO, I see no difference in the post by Rich and the initial comment from ps, except that it was redundant. In addition it was a redundant statement and I see no difference, in my opinion.

Here’s the professor’s full article from the Voice of San Diego.

Declining Home Inventory

It would seem that San Diego’s housing inventory flood has finally begun to recede. According to my spot checks at ziprealty.com (an incredibly useful site, I would add), the number of condos or single-family homes for sale peaked in August at right around 21,000 before starting to head down.

This is interesting because in both of the prior years, as the accompanying graph indicates, inventory growth didn’t turn around until October. Why the early peak in 2006?

It’s not that more units are selling. Sales volume continues to shamble along at 20 to 30 percent below last year’s levels. So it would seem that fewer people are listing their homes for sale — and that more would-be sellers are removing their homes from the market.

I think the most likely explanation is that the combination of slow sales and heavy competition has caused people to throw in the towel. Those of us who have been through it know that having a home on the market is fairly high-impact, requiring one to keep one’s living space in museum-quality shape at all times. Rather than enduring this situation into the slow (or in this case, “even slower”) season, many a seller is likely giving up and hoping for a more housing-friendly 2007.

If this theory proves correct, we can expect inventory growth to be fast and furious early next year.

— RICH TOSCANO
Tuesday, October 3 — 9:39 am

I agree with Rich’s analysis of inventory.

I have a friend who’s about to pull his house off the market and rent it out (so he says because he still lives there) since he can’t stand showing it anymore.

I wish the sellers good luck with an uptick in the Spring of 2007. I believe that 2007 will be the harbinger of what’s to come for real estate. If sales continue to slide in 2007, then all bets are off for housing.

I’ve been following a neighborhood in San Marcos that seems to be a good gauge of what is going on overall in this market. In June there were 15 homes for sale in this 120 home community, none pending or sold, all priced at comps. In August, still 15 for sale, but one was also for rent and a third to half were reduced. Early September I drove through and there were 12 for sale and 3 for rent. Finally, last week there were only 8 for sale and all were reduced, 3 for rent, all the rest cancelled. One of the 8 had listed in March at 725k and now has 589k as the lower end of the range!

Conclusions:
-Some sellers really want out = huge reductions.
-Other sellers have cancelled and will re-list in Spring.
-Median prices reported this Fall will be ugly. I don’t remember seeing price drops like this in June and July and once these things sell it will really pull things down.

I have been looking at relocating out of state, but if it gets low enough I may consider staying. It’s tough to say that now is a good time to buy though since it is likely just going to go lower in the coming months. This board provides us with so much insight that we will likely have a good sense as to when the market is near bottom before the masses believe it, don’t you agree? It is not even necessary that this be predicted so long as we keep our ears to the pavement and recognize it when it happens.

It is interesting because unlike previous cycles, the average person has unbelievable information resources like blogs and useful websites to gauge the market. However, the vast majority of people are not tracking these things to the extent that we are and I believe that this gives those of us who are a great advantage. Contrast this with the stock market where information is absorbed immediately, the market is extremely efficient and therefore there is little opportunity to use information to your advantage. Here we have inefficient, local/regional real estate markets where a minority of people have their hands on the most up to date information.

Even if I move, I plan to keep my ear to the pavement and follow this market. If you take a very long range approach San Diego is a very solid investment. A city like San Marcos, for example, with the university and growth is a great place for a rental property.