Here’s an important statistic that’s been getting a lot of attention lately in housing circles – the decline in inventory. I’ve been pretty vocal about the fact that I do not think there’s much downside in housing from here, but that I believe it would be extremely abnormal for a post-bubble turnaround to occur. Generally, these post-bubble eras end up working off excesses for a very long time. And I think this is a pertinent detail. As you’ll see below, inventory has come way down. But let’s not lose perspective. We’re only back to the 2006 levels when, by pre-crisis standards, this level would have been considered well above normal. I expect more working off to be done….Our friends at Sober Look have the details:
As discussed earlier the US housing recovery is progressing, albeit quite gradually, as the unsold inventory of homes continues to decline.
Barclays Capital: – We continue to see conditions in the existing home market as putting downward pressure on inventories and as supportive of agradual cleansing of shadow inventory. Our view is that housing is in a recovery phase, but one that will be restrained by the availability of credit, pace of improvement in labor market conditions, and overhang from distressed and foreclosed properties.