Housing: Watch Inventory

I've been watching for sale inventory very closely this year. My guess is inventory probably bottomed early this year. Inventory in many areas is still very low, but when more inventory comes on the market, buyer urgency will wane - and price increases will slow.

Several real estate agents have told me that they think more inventory is about to come on the market in their selling areas based on their discussions with potential sellers. I wouldn't be surprised if inventory builds all year (usually inventory peaks in July or August). We also might see less demand from cash flow investors who have bid up the low end.

Note: I'm confident that prices have bottomed (post-bubble), but if more inventory comes on the market, we will probably see more seasonal price declines this winter than last winter.

Jim the Realtor thinks this home might be a "Canary in Coal Mine" for the $1+ million market in North County San Diego. He thinks this house would have sold quickly earlier this year, and he will be watching to see when it goes pending (it has only been only the market a few days):