Sales appear to be on track to finish under 10-year average in February but it will finish way over last year's low. You can argue this one either way. It is good to be under 10-year-average but it is not good that it has increased so much year-over-year. But there is no doubt that a big player in this month's sales have been the historically low New Listings this month which I will discuss further below.
Inventory is struggling to rise in February. It has yet to surpass January 31st sales as of today. Although it should rise eventually towards the end of February, the damage has already been done for this month. This was an opportunity lost to see a major rise in TI this year. This increases the probability of "TI flatline" that we saw in year 2013 from February to June. If TI flatlines, it will be devastating for buyers as the starting point for TI is lower this year than in 2013.
This is the news of the year so far just like in 2019. We are starting 2020 at levels under any other year in recent times. Let's not forget that year 2019 was the lowest new listings year we've had in the longest time. When will the sellers return to the market? We've been waiting for this all of last year and now the first 2 months of this year. If it must happen, it should happen March to May when New Listings hit the peak season. Time to grab the popcorn.
De-listings are slowly starting to decline against the 10-year average which is typical for a seller's market. As you can see on the chart above, 2009, 2015, 2016 and 2017 had very low de-listings. We can expect the de-listings to remain low for the next couple months. This is because we have so few Total Inventory to begin with while the SAL ratio remains high. This is the right cocktail for low-delistings.
It's hard to see this year's MOI trend if you can find it. The reason why it's hard to look at is because this year's trend so far is nearly identical to 2 other years: 2011 and 2015. This 3 lines nearly overlap each other. One can recall that 2011 was a balanced year and 2015 was a seller's market. With MOI nearly guaranteed to drop month-over-month in March, we should be well within the seller's market in March.
MOI 0-4 months: Seller's Market
MOI 4-5 months: Seller's Market (but price increase expected to be similar to annual inflation)
MOI 5-7.5 months: Balanced Market
MOI > 7.5 months: Buyer's Market
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