The number of resale homes sold in August was up 9.0 percent from a year prior. Inventory was down over the same period by 11.2 percent.

Putting supply and demand together, there were 6.9 months’ worth of inventory for sale in August — substantially better than August 2007’s 8.4 months and just about the same as the August 2006 figure.

The 6-7 months’ worth of inventory we’ve been seeing lately would in normal times be the hallmark of a reasonably healthy, if not exactly fast-paced, market.

But these are not normal times, as the following graph of foreclosure activity indicates:

More existing homes are entering foreclosure each month (the blue line) than are being sold. That situation is unprecedented, as far as I can tell, and it’s clearly not a positive. So while the first graph would indicate that supply and demand are getting back into balance, the ever-fuller pipeline of potential must-sell inventory depicted in the second graph shows that things are more out of whack than they seem.


Leave a comment

We expect all commenters to be constructive and civil. We reserve the right to delete comments without explanation. You are welcome to flag comments to us. You are welcome to submit an opinion piece for our editors to review.

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.