"As the housing market slows down, many areas in the East Bay are showing a growing inventory of homes sitting on the market. And while Antioch and Brentwood are at the top of the list of standing inventory, so are Rossmoor in Walnut Creek, Alamo and Diablo." as stated in an article in today's Contra Costa Times, written by Barbara Hernandez, and entitled "East Bay Housing Inventory Stacks Up."

Basically, the months supply is the ratio of inventory to sales. What it tells us is how many months the stock of homes for sale would last, if sales continued at their current rate. The "State of Equilibrium" is considered to be 6 months and the norm for housing inventory. This is the state where there considered to be an equal number of sellers and buyers. This can also be used as a guage as to whether we are in a "Buyer's," "Normal," or "Seller's" market.

"Bay Area home sales held steady at a five-year low in October as buyers and sellers circled each other in a game of wait-and-see. Prices remained flat, a real estate information service reported." - DataQuick

"The year 2006 marked a turning point in the California housing market. After four successive years of new records for both statewide sales and the statewide median price, the existing home market declined sharply in 2006, while price appreciation slowed with each passing month." - 2007 Housing Market Outlook as posted in CAR, (California Association of Realtors).

A Summary of CAR's Forcast for California in 2007; "The market should see less of a decline in sales in 2007, with an anticipated 7 percent decline in statewide sales for 447,500 homes. Inventories will remain in the range of the long run average of 7 months through much of 2007. Inventories, affordability constraints, and a continued gulf between seller aspirations and buyer expectations will result in a 2 percent decline in the median to $550,000 in 2007." You can find the current NAR national forcast HERE.

Home prices fall, after 4 hot years. Median figure for Bay Area dips from $616,000 to $611,000.

"The Bay Area could be following other regions of the country that already have experienced a decline in prices. The National Association of Realtors reported that the median price for a house nationwide fell 1.7 percent to $225,00 from $229,00 in August, the first drop since 1995."

"Historically, California has had about 7 to 10 months of inventory, according to the realty group. This means the current supply is close to normal but it feels like a significant change after a tight market. As buyers continued to take their time, the number of homes sold sank to a five-year low last month, dropping almost 30 percent from September 2005, DataQuick found. The total number of houses and condos sold fell to 7,907 in September from 11,205 a year earlier." - San Francisco Chronicle, Marni Leff Kottle.

"Most homeowners are simply going to wait out the slowdown," said Leslie Appleton-Young, chief economist for the California Association of Realtors.

Labels: Bay Area Real Estate, DataQuick, Housing Inventory, Housing Market, Months Supply, Real Estate Cycles, San Francisco Chronicle