Months of Inventory Way Up...Prices Must Go
The months of inventory index is up for Vancouver's Westside market for all home types. The aggregate index including all home types jumped again from 14.34 months in October to 22.25 months in November. In January it was at 4.55 months. Remember that: “Months of Inventory” is a measure derived from the number of active listings during a given month divided by the number of sales that month. It indicates the theoretical length of time it would take to sell all of the properties on the market if nothing changed. Historically, 0-6 months of inventory has meant generally upward price pressure for the ensuing six months, 6-8 months of inventory meant a flat market with respect to pricing and over 8 months of inventory has precipitated downward price pressure. It is substantially up in spite of decreasing numbers of listings being added to the market over the last two months. This is because sales have continued to plunge; partly due to seasonal norms and likely also due to the tide of uncertainty increasingly fueled by the media. By Sam Wyatt, Vancouver Realtor.