Inventory rising ... with a vengeance

Back in late January, I put up a post about for-sale housing inventory in my neck of the woods -- northern Palm Beach County, FL. I noted that the number of properties for sale that met my search criteria started declining late last year (November, to be exact). The same thing happened nationally -- existing home inventory for sale dipped 1.3% (month-over-month) in November and 7.9% in December.

A lot of chowderheads came out of the woodwork as a result, saying that was "proof" the inventory problem had been solved and that everything would be sunshine and roses again by this spring. But I told you it was nothing more than seasonality -- for-sale inventory almost ALWAYS declines late in the year due to the holidays. Many people who fail to sell in the spring and summer pull their homes around Thanksgiving-Christmas, then re-list 'em starting in late January.

As the above chart shows, 2007 is shaping up as I expected in my little corner of the world. For-sale inventory recently hit 666 units (hope you're not superstitious!), a fresh high and up from 150 when I started this whole tracking exercise in June 2005. If the same thing happens NATIONWIDE, and I suspect it will, look for a new high in for sale, existing home inventory sometime in the Feb-Mar-April timeframe.