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So Much for That Housing Shortage

E-MAIL STORY

The accompanying chart should shed some light on why home price declines have picked up the pace in recent months. On display is the number of months' worth of inventory listed for sale.

This metric is very simply calculated by dividing the number of homes for sale by the number of homes sold during a given month. The resulting figure gives us a rough but decent-enough idea of where things stand as far as short-term supply and demand are concerned.

The chart shows that supply has risen substantially compared to demand in recent months. As it stands, the number of months' worth of available inventory is more than double what it was at this time last year.

Conventional wisdom has it that a housing market with over 6 months of inventory is considered a "buyer's market," for what little insight that provides.

-- RICH TOSCANO

A Nerd's Eye View

Rich Toscano is a financial advisor with Pacific Capital Associates*;
he also writes about San Diego real estate at Piggington's Econo-Almanac.
Contact him at rtoscano@pcasd.com.

Recent Nerd's Eye View Posts

So Much for That Housing Shortage (October 20)

Home Prices Still Declining (October 18)

A Wrench in the EZ-Credit Works (October 6)

Rates On the Decline (October 5)

Declining Home Inventory (October 3)

Part Precision, Part Luck (October 2)

A Year Or Two? (September 27)

Amaranth versus a CD (September 25)

Hedge Funds (September 25)

*Investment advisory services and securities offered through Girard Securities, Inc., member SIPC/FINRA.

This Just In

Study: No Significant Harm from MB Landfill:

The report commissioned in 2002 to study the effects of the old Mission Bay landfill on the area nearby is complete. No significant contamination has flown into the bay, the report said.

Friday, October 20 -- 8:08 pm

Peters: I'll hear NBC appeal:

The council president said he would hear an appeal of the city staff's decision that the environmental study for the Navy Broadway Complex suffices, but has not received any documents requesting a hearing.

Friday, October 20 -- 8:09 pm

SDCERS Tweaks Deficit Calculations:

The retirement system's invoice for the city next year will include payment for benefits that were not accounted for in past bills.

Friday, October 20 -- 3:35 pm

Profit or Loss :

Are home sellers who won't reduce prices forgetting how much they paid for their homes in the first place?

Friday, October 20 -- 3:27 pm

LETTERS TO THE EDITOR

Prop A Should Fail on Election Day:

Friday, October 20 -- 5:14 pm

CAFÉ SAN DIEGO

Agree and Disagree :

A real reform should have targeted corruption head on.

Wednesday, October 18 -- 5:39 pm

COMMENTARY: SLOP

Let's Hire That Guy :

An English investor saw Amaranth for what it was and got out -- right before the county pension got in.

Friday, October 20 -- 5:58 pm

COMMENTARY: RICH TOSCANO

So Much for That Housing Shortage :

Supply of for-sale San Diego housing continues to outstrip demand.

Friday, October 20 -- 3:46 pm

'The Powers to Be':

A little recognition. » Nov. 21 -- 4:03 pm

Libraries Could Be Spared:

It doesn't look like the mayor has the City Council votes to shut down libraries and rec centers.

Nov. 21 -- 2:02 pm

Opening Day Melee:

The first day a store opens, shoplifters have a field day.

Nov. 21 -- 11:43 am

SURVIVAL IN SAN DIEGO

Unemployment Rate Reaches 6.8 Percent:

Retail and construction sectors lose a combined 10,000 jobs over the year in San Diego County.

Nov. 21 -- 5:43 pm