What is going on with inventory?

What's that supposed to show? Good news?

3 whole minutes before steve swooped in to quash any possible perception of positive news. He's losing it.

You tell me. Less bad news?

JM: I think the 3-month and 6-month lines may be a bit more telling. Also, Noah has said all along that the underlying data need refinement.

That said, all aspects of the market seem slow, including new listings. So I'm not surprised to see the totals dip a bit.

I understand the 3-6 month trend West81st, just pointing out some data over the last two weeks. Decrease in new listings would be an interesting trend wouldn’t it?

JuiceMan: that chart is an optical illusion. The change in inventory is 140 units out of 7,820 which is a change of less than 2%. The scale of the chart 20 units is so small that it exaggerates small numbers, makes 2% look like 50%. This is an old business school trick to fool shareholders, spin news. Assuming all of the homes no longer listed as inventory were sold, that would make a 1,680 per year run rate which would take 5 years to clear. Inventory doubled from Jan to June. Up 100%, down 2%! Fools rush in.

It cracks me up how people who stopped taking math after Calculus 101 are suddenly experts in statistical analysis.

"I understand the 3-6 month trend West81st, just pointing out some data over the last two weeks. Decrease in new listings would be an interesting trend wouldn’t it?"

not really, it probably has more to do with the combination of the summer being traditionally slower and sellers being aprehensive to sell into a softening market...but in reality a two week data blip after huge runup means very little...its like saying oil just ran up to 140 then sold off to 134, thats good news for gas prices!!

I look at it a bit differently 80sMan. What do you feel is a healthy inventory for Manhattan? 7000? If you choose 7000, 140 units is about 17% of 820, erased in two weeks. At the current run rate, we would be back to 7000 in 3-4 months. Pick 6000 if you want, but there will always be some amount of inventory in Manhattan, so executing a % basis on the entire inventory number isn't as helpful as looking at it from a (current - baseline) perspective.

That said, two weeks does not make a trend (nor does three months) but I thought it was interesting enough to point out.

But 7000 represents a 10-month supply of apartments at the historical rate over the past 10 years. And sales must have been particularly high over the past ten years given the increase in prices, so 7000 at current rates of sales is probably much higher than that.

80sMan: I wouldn't call it spin in this case. It looks as though Noah just let his charting software scale the chart by default.

JuiceMan: A decrease in supply is interesting in any market. In this particular market, though, you have to consider the possibility that some supply is being held back, because the pipeline isn't very transparent. (Of course, you also have to consider the likelihood of some pent-up demand.) This is why I stick to execution prices: the other factors influcencing this market are so complex and opaque that I don't trust any valuation mechanism other than actual sales. And with seller concessions often embedded in the public numbers, even selling prices aren't a totally reliable yardstick.

West81st, we can all argue (as we tend to do) about different measurements and what they mean. None of us have a crystal ball, so when there is a trend blip (albeit for two weeks) I think it is worth noting. It could mean nothing but it doesn't hurt for it to be discussed. Your comment says to me that unless you have the perfect measuring stick, then it isn't worth measuring. I disagree, and would prefer to explore anecdotes and reasoned arguments to determine a possible cause. Unfortunately, anecdotes and arguments don't come in measuring stick form.

I suspect the trend is going to plateau or slowly dip the remainder of the year. When sellers realize that they can't get the prices they want, they will start pulling their apartments from the market. It is only those who need to sell or think that this is a good time to take profit who will cut prices to market. Flippers who recently bought will be mostly disappointed.

"It cracks me up how people who stopped taking math after Calculus 101 are suddenly experts in statistical analysis."

It cracks me up when people that have no idea what they are talking about attempt to insult people and make themselves look like an ass. 80sMan, welcome to club Massengill

JM: I think you've added the right disclaimers. Your opening post gave the appearance that you were headed for a much stronger assertion of a meaningful market trend.

What's the volatility of this time series? What's the probability that the 2-week change in housing inventory is due to random fluctuations in the data as opposed to a change in the trend? I sometimes wonder what people really see when they look at housing data. I suppose it's just $$$$

It's interesting that you say that West81st, because one could argue that "3-month and 6-month lines may be a bit more telling" may not be any more meaningful than the two weeks I posted above. 7800 units isn't meaningful at all unless you compare it to the beginning of this year. Some of the crack pots on this site have predicted Armageddon because of these numbers. Is that any more meaningful?

JM: I have absolutely no idea, and I'm happy to say so.

its stagnating..I just wanted to use that word. STAGNATING! STAGNATION!