spend too little time looking at, and reading, CRs charts & articles.
If these still are not the best available, show me any better.
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The bottom line: Sales were weak in November - below consensus and close to Tom Lawler's forecast - and existing home sales will continue to be weak for some time.
Inventory is very high, and the year-over-year increase in inventory is very concerning. The high level of inventory will continue to put downward pressure on house prices.
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IMPORTANT: On a seasonal basis, inventory usually bottoms in December and January, and then will start increasing again in February and March. Since the NAR "months-of-supply" metric uses Seasonally Adjusted (SA) sales, but Not Seasonally Adjusted (NSA) inventory, this seasonal decline in inventory will lead to a lower "months-of-supply" in December and January. I expect inventory in December to decline to around 3.4 million units, and the months-of-supply to fall to the mid-to-high 8s.
The key is to recognize the seasonal pattern, and watch the YoY change in inventory.
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Inventory increased 5.4% YoY in November.
The year-over-year increase in inventory is especially bad news because the reported inventory is very high (3.71 million), and the 9.5 months of supply in November is well above normal.
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Sales in November 2010 (4.68 million SAAR) were 5.6% higher than last month, and were 27.9% lower than November 2009.
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Months of supply decreased to 9.5 months in November from 10.5 months in October.
This is very high and suggests prices, as measured by the repeat sales indexes like Case-Shiller and CoreLogic, will continue to decline.
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Existing Home Inventory increases 5.4% Year-over-Year
http://www.calculatedriskblog.com/2010/12/existing-home-inventory-increases-54.html
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November Existing Home Sales: 4.68 million SAAR, 9.5 months of supply
http://www.calculatedriskblog.com/2010/12/november-existing-home-sales-468.html
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