What inventories look like on a chart ...

To follow up on my last post, here is a chart showing total existing home inventory levels over the past six years. You can see that supply climbed steadily during the lion's share of the boom, then skyrocketed in 2005 and early 2006. That little, itty-bitty sideways pattern of the past few months? That's what is responsible for all the happy talk about how we're "solving" the inventory problem.

Look, the bottom line is we have an Everest-sized mountain of homes on the market. And it's likely to increase in early 2007 as well, once all those "re-listers" put their homes back on the market. I doubt we'll see a supply surge as severe as we saw in 2006. But my bet is that it'll definitely show up on this chart come February, March, and April. And I'm guessing a lot of economists will talk about how they're shocked ... SHOCKED ... to see supply climbing again.