I subscribe to the point of diminshing returns theory when it comes to sales volumes vs. inventory. I think that after a certain point of adding more inventory it no longer matters how much excess inventory we have. What’s the difference if we have 12 times as many listings as monthly sales or 9 times as many? Too many is too many, and the only sales that do go off will be the ones where the sellers were sufficiently desperate that they were willing to accept those losses.
What’s really relevant is the number of “must sell” listings vs. the sales volumes, ’cause that’s the combo that will drive the pricing structure towards equilibrium between supply and demand.
