This graph shows the inventory at the end of each month divided by the number of sales. The idea is to give an indicator of how many months of inventory there is, at the current pace of sales. For months like January (high listings, few sales) and December (few listings, some sales) the measure is a little wonky, but it is still interesting.
In the Fraser Valley, we have seen numbers in the 6 to 7 range. For the REBGV, we have now hit 4. As Mohican's excellent analysis has shown, we shouldn't expect much in the way of price decreases until we hit 7 or so months of inventory. So, we're not there yet.
Notice the growing gap between the 2007 and the 2008 lines. Not much difference in January; bigger difference in March. It will be interesting to see where this goes.
Data come from two sources. First, the REBGV was disclosing their total inventory in their 'blurb' on the cover of their monthly package for awhile in 2006-07. But, they stopped now. So, for the other months, I got the month end inventory from PaulB. I thank him for that. There are a lot of gaps in the graph, however, since I don't have the month-end inventory back to 2005.
Vancouver Housing Blog
UPDATE: Here is an updated chart thanks to PaulB's data. Thanks Paul.