Housing: Inventory will Tell the Tale

Today, in the Calculated Risk Real Estate Newsletter: Inventory will Tell the Tale

A brief excerpt:

Two years ago, in November 2021, I wrote Inventory will Tell the Tale and recounted how changes in housing inventory had helped me forecast the housing market at several key points. Here is an update to that post with a few additional comments.
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Starting in January 2005, I was very bearish on housing, but I wasn’t sure when the market would turn. Speculative bubbles can go on and on. However, the increase in inventory in late 2005 (see red arrow on graph below) helped me call the top for house prices in 2006.

Several years later, in early 2012, when many people were still bearish on housing, the plunge in inventory in 2011 (blue arrow on graph below) helped me call the bottom for house prices in early 2012 (see The Housing Bottom is Here). 
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With higher mortgage rates and increasing inventory, a key question right now is “Will prices decline over the winter?”. I’ll update some price projections soon.

But I believe one thing is certain: inventory will tell the tale!

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