Resale inventory declined in January, per the usual seasonal pattern, but remained well above the levels seen in January 2007. The increase was weighted once again towards single family homes, of which there were 23.6 percent more for sale than a year prior. There were 16.7 percent more condos for sale than last January and 21.0 percent more homes overall.

The demand side of the equation continued to be extremely weak. Sales are usually low in January, but not this low: from last January’s already-depressed levels, sales volume was down 31.3 percent for single family homes, 37.2 percent for condos, and 33.5 percent overall.

Putting supply and demand together into a single figure, there were 12 months worth of inventory for each property type, meaning that at January’s sales pace it would take a year for all available inventory (as of mid-January) to be sold. This is about the same level as recent months, though as January’s orange triangle in the accompanying graph shows, it is exceedingly high compared to this time last year.

This glut of resale inventory, much of it of the must-sell variety, indicates that downward price pressure will be worse in early 2008 than it was in early 2007.

— RICH TOSCANO

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