of the 4 pages of posts on this thread, docteur’s post was the best and most informative.
My personal belief is the inventory will continue to climb until November, and fall dramatically as the “testing the water” crowd get ready for uninterrupted holiday season.
if you look at last winter, listings tapered off from 16,400 to 13,900, a 15% drop off. This season there may be more of this drop off due to increase in the “testing the water” crowd.
what I disagree with is what happens when this crowd says enough is enough and we are pulling from the market for good. I believe they will be replaced by ARM reset “need to sell” folks. There’s a lot of those 3/1 ARM folks that purchased in 2003 and 2004 and all that is coming due this year and next. And soon the 5/1 ARM folks will have to start selling. The big one are folks that purchased in 2004 at the very top of the market, majority using 0 down 2-5 years ARM.
What I think may happen is we’ll see the usual dip in inventory this winter, then we are going to see another brake in record next year. here’s something that may provide some answer: take the total number of sales in 2004 x % of transactions involving 3/1 ARM x 50% (assuming half already sold, will stick it out with the much higher payment or refi to a fixed), and add this number to the lowest inventory number this winter, and you’ll get the new high in 2007.
