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

Meantime, as of May 2013 we have inventory figures for January, February, March and April of 2013. 2013 is the blue line running straight across the page at the 19,298 level. You can see that we began this year with the second highest inventory level since I began tracking inventory. That’s the same as saying the second highest inventory ever.

The highest inventory start was January 2009. We were coming off the 2008 record inventory level, and inventory continued to fall through 2009. That isn’t happening now. We took a bit of a breather in December of 2012, but we’re climbing right back up the inventory mountain.

Like last year, we grew early, with both January and February adding lots of inventory. The question then was which way the market would go: a repeat of 2009, during which we slowly digested the inventory we generated in 2008, or would we go to new highs with correspondingly low sales, leading to price drops. As of right now (May 2013), after an indication that we could either mirror 2009 and digest inventory, we’re starting to repeat the high inventory years. This doesn’t mean that we’ll see significant price drops – 2008 was quite different from 2010 – but it does mean that sellers are going to be in a very competitive environment.

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 of between 30% and 40% mean we gain 1 3/4 to 2 1/3 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.

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.