Number of new homes in inventory
Posted by WARREN MOSLER on August 26th, 2009
(Sent ahead of the 10am number)
The actual homes in inventory, as per the attached graph, is exceptionally low, particularly on any kind of population adjusted number.
And with actual inventories this low, much of what’s left may be undesirable for any number of reasons.
While orders for new homes can pick up, it’s unlikely sales out of inventory can show
substantial gains as there doesn’t seem to be much inventory to buy.
But even a modest increase in sales is likely to drop the ‘number of months’ inventory data.
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August 26th, 2009 at 11:51 am
This number doesn’t include the shadow inventory that is probably not for sale, but would be if conditions were better.
I’ve seen estimates as high as 100% higher inventory, but I think calculated risk has put the number around 50% or so.
In any case, inventories are going down.
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August 26th, 2009 at 12:11 pm
See this chart for the number of vacant homes in the U.S.
http://www.housingbubblebust.com/HsgData/CB/Existing/USHsgVacant.html
It has come down a bit: see this bloomberg chart for more recent data!
http://www.bloomberg.com/apps/cbuilder?ticker1=HOWNVAC:IND
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August 26th, 2009 at 5:58 pm
the population is still growing, the existing stock depreciating, and little new is being built.
Foreclosures are causing temporary vacancies by the millions until the get sold at market prices, however low, and re occupied.
I took over a few new foreclosed $150,000 homes in Cape Coral Florida and while it took a few months they are now rented at about $900 per month which gives me a bit more than a money market return on the rents.
Also, lots of what were second homes are now on the market as rentals.
Things are very difficult out there, and there is probably more shadow inventory than ‘normal’ but overall it’s hard for me to believe there is a major overhang overall.
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