October Housing Supply and Demand

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Resale housing demand was once again very weak last month. There were 10 percent fewer existing homes sold in October than in September and 35 percent fewer than in October of 2006.

Because most sales that closed in October resulted from contracts signed in September, it's unlikely that the late-October fires had a big impact on the month's closed sales. The fires will likely result in a decrease in closed sales next month, however.

The number of homes for sale was down marginally from the prior month but still slightly up from a year ago. Thanks to the ever-declining pace of sales, though, the number of months' worth of inventory continues to rise. As of last month there were a little over 13 months' worth of resale inventory on the market -- a 62 percent increase from last October.

In other news, Kelly Bennett reports that Professors Case and Shiller, the proprietors of my favorite home price measurement, are now producing three separate indexes for low-, medium-, and high-priced San Diego homes. I had no idea that these multiple indexes were coming down the pike when I wrote of the need for just such a thing a week ago. The refined Case-Shiller indexes are the result of a lot of work and will be far better than anything I could have done myself.

Kelly's article outlines the big trends that have played out within the three market segments. I will put together some more detailed charts and analysis after I write up the October foreclosure data next week.