Just a quick comment about inventory and the buyer sentiment. As a Realtor I cannot overstate the effect of the buyers sentiment changing. Personally, this has been the most profound change. Now I am not a 20 year veteran agent but I believe the change in attitude is much more responsible for the declining sales then anything else. While alot of sellers are still clinging to outdated pricing levels, there are a good majority who have priced more agressive. Mortgage rates are down significantly from the spring as the 10 year has rallied. Yet sales are SUBSTANTIALLY down. The fact is that the psychology is much different. Buyers do not feel they will be left out of the market by waiting.
Inventory levels should actually drop over the next few months due to seasonal factors. The heaviest listing volume always occurs in the spring. So in the fall and winter you see new listings decline and stale listings drop off due to cancellations and expirations. You also get people who gave up and decided to rent out thier home or sit tight. I feel the tide is going out (inventory wise) but the fun really begins in February when it comes back in. It would not surprise me to see it dip down below 20k into the high teens even. However don’t delude yourself, analyze the data and if the drop in inventory is not matched by a gain in sales then that would confirm that this is simply seasonal.
I believe that the months inventory is a great measure but it can be misleading when there are inventory fluctuations that are seasonal. So even that months (the fall months)inventory may be somewhat optimistic as we tread into the fall.
BTW Chris Johnston – If you ever need a lackey I am your man!
