What should be troubling is the ratio of listing inventory to sales transactions. The number of residential sales listed in the MLS 2006 (29,000+) demonstrated the lowest volume since 1997, despite the fact that we’ve added just over 10% more homes and condos to the inventory since then.
If 2006 was bad, 2007 is shaping up to be even worse. The first quarter of 2006 saw 6,700+ sales in the MLS, which at an average of 2,235/month is about what you would expect for a first quarter in a 29,000 sale year.
So far, the first quarter of 2007 has resulted in <5,800 sales, which demonstrates a drop of ~14.5% when compared to 2006. If this trend holds up the volumes for 2007 could slide in there between those for 1997 and 1996.
Meanwhile, the number of must-sell transactions is ratcheting up to comprise an ever growing percentage of the transactions.