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Inventory by Month


If you already know how to read this graph, excellent. If you don’t you can find an explanation below.

Meantime, as of May 2014 we have inventory figures for January, February, March, April of 2014. 2014 is the blue line running straight across the page at the 18,119 level. You can see that we began this year with the third highest inventory level since I began tracking inventory. That’s the same as saying the third highest inventory ever.

We started at almost the same inventory levels as 2012, but you can see that we are adding inventory at a slower rate this year. The growth rate is right in the middle of what we’ve seen over the past decade, neither fast nor slow.

If we are close to repeating any past year at this point it would be, I think, 2011 or 2004. Both years were quite different in terms of price appreciation, with 2004 being a big gaining year and 2011 being a year of big fluctuation, but with prices ending in December very close to where they had been in January.

What does this mean for prices and for sales? Clearly, there is a still a lot of supply, but not as much as in recent years. Demand still lags supply significantly, so we are not going to see increased prices overall. There will be pockets that rise, but average prices won’t rise in the short term. Buyers will continue to have lots of choice, but they are still buying. Sellers have been having an easier time, with list/sell rates regularly over 50%, but that won’t be enough to see big price jumps.

Last year I wrote that I’d like to see the list/sell consistently higher, perhaps in the 40%-50% range, but that’s a perfect world scenario. We’ve got that. Well priced (relative to the market) listings are selling fairly quickly.

This chart doesn’t show the growth for the current month. For that you need to read the daily stats and extrapolate. Sustained sell/list ratios in the 50% mean we gain 2 listings for every one that we sell. That’s a net gain. If we have higher sell/list ratios on a sustained basis then inventory will either flat-line or drop.


How To Read the Comparative Inventory Graph


There are a lot of lines on this graph, which is what happens when I keep adding data.

  • Each year has it’s own color;
  • The current year flat-lines at the last month’s inventory level;
  • You won’t see any change until we have at least two months worth of figures for the current year.
  • Monthly totals are added during the month following.

Compare the years and then look at how prices behaved. Sometimes the law of supply and demand pans out; sometimes it does not.

I like this graph because it allows me to compare current inventory levels with past years, which in turn allows me to reach various conclusions.

After almost a decade of very strong price growth, often in double digits on an annual basis, the credit crisis of 2008 occurred. It scared many property owners who tried to exit the market. This lead to a record high inventory level – the grey line. This explosion in inventory also lead to falling prices. The degree varied with location, but it’s safe to say prices retreated between 15% and 18%.

The following year inventory continued to fall (the green line). It started at the highest January level ever and fell to very low levels. That change, from a high start to a low finish, is worth noting. It doesn’t always happen. Falling inventory was accompanied by increasing prices.

For the same sort of change in the opposite direction, take another look at 2008’s grey line. The year began with low inventory levels, and ended with the highest levels ever recorded in the REBGV, and as we noted, prices fell.

That doesn’t always happen. We saw a second explosion of inventory in 2010 (the red line), and while there was a drop in prices during the year we ended the year at record price levels, yet again. Inventory began about 12,500, climbed to 20,000 and then fell back to where it began.

All this makes 2012, the yellow line, very interesting. We began with high inventory (the 2nd highest ever) and then proceeded to explode. We reached the second highest inventory levels ever, and did it earlier than we did in 2008. After March common wisdom in the media was that sellers had to adjust to a new reality. In fact, most sellers didn’t get the memo. They simply refused to accept lower prices. Sales volumes fell below decade averages as a result, but prices changed very little. By the end of 2012 we had returned to the same inventory levels we had at the start – roughly 15,000.

What’s It Mean?

15,000 active listings is a lot of inventory. The years with the big price gains generally had inventory levels in the 12,000-13,000 range most of the time. Even after a precipitous drop in inventory during December 2012 we still started January 2013 at a high level. Since then we’ve been adding inventory at a steady rate. I track new listings each day for both the REBGV and FVREB, so my daily numbers are high, but the REBGV is probably adding 150 net listings each day. I expect to see another high inventory year this year. With interest rates remaining low I do not expect to see prices fall much. For us to see any significant price drops I think we’ll need to see some big negative economic news, either global (like 2008) or local.

All numbers come from my weekly stats charts, which are based on REBGV Stats. These stats are believed accurate, and every effort is made to keep them that way, but the REBGV assumes no responsibility for them. Any errors are purely mine.

My name is Rob Chipman and I’m a realtor, pilot and all around super hero based in Vancouver, BC. I really enjoy flying, playing guitar and hockey, real estate and the Chilcotin. My company is Coronet Realty Ltd., located at 3582 East Hastings Street, Vancouver, BC, V5K 2A7. I have a C-150L that I own with two other pilots, based out of Pitt Meadows. Do not hesitate to contact me by email if I can help you do anything, especially if its likely to be interesting.

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