The National Association of Realtors released the existing home sales and inventory numbers earlier today and I wanted to bring some attention to it. Additionally I want to draw a paralell between what has happened in the US housing market and what is likely to happen in the Vancouver housing market.
Please read the full analysis of the release here at Calculated Risk.
The main chart I want to draw your attention to is the Months of Inventory chart.
The REBGV has been fluctuating in the 3 to 6 months of inventory level for the past 3 years and has witnessed rising real estate prices during this time. Quality adjusted US real estate prices peaked in the later part of 2005 and began their descent in earnest during the summer of 2006. By my estimation we are tracking exactly 2 years behind the US market.
In order for us to see price decreases we need to have over 6 months of inventory for a sustained period of time. The higher the inventory goes the faster the price drops will be. Keep an eye on Paul B's site for inventory updates for the REBGV. I will post Fraser Valley stats here at the beginning of each month. Fraser Valley is already over 7 months of inventory.