Months of Inventory

East Bay Housing Inventory for 27 Communities

The total Months of Inventory has been holding fairly steady for the past several months with August 3rd showing a 4% decrease for the twenty-seven communities compared to July 2nd.  Seventeen were lower, nine higher and one even with last month.  Overall active listings decreased by 3% and pending sales increased by 3%.  August 3rd overall average was 4.60 months compared to 4.49 on July2nd.

These figures only measure market activity compared to what is available for sale.

It is a snapshot to where the market is today, buyer’s, seller’s, or balanced market.  These figures tell you nothing about prices, values, or how many days it takes to be a pending sale.  Check with your local Realtor for this information.

Although it is a buyer’s market, historically 4.60 months of inventory would be a balanced market.  This unique situation of having a large number of short sales, foreclosures, and lenders higher qualifying standards, plus the shortages of funds for jumbo loans, has temporarily changed the definition of a balanced market.

We are experiencing a unusually high number of pending sales in the outlying areas where a lot of beginning price range new homes have been constructed over the past five years and have resulted in substantial price drop that have created some relatively good values. We are seeing less price drops in the more populated mid to higher priced homes.

We won’t go back to historical standards of Month of Inventory until most of the short sales, foreclosures have worked through the system, better liquidity of lender funds and some favorable coverage in the media.

In the bay area five months of inventory is considered a balanced market and NAR states that six months of inventory for the nation is a balanced market.

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