August 2020 Housing data — prices react to inventory shortfall

Last month, inventory dropped to the lowest it’s been since the
bubble. Prices have moved up in response.

Sales continue to be strong… nothing spectacular, but showing no
weakness at all:

Meanwhile, available inventory has dropped off a cliff:

The result: super low months of inventory:

As often discussed here, months of inventory is a good predictor of
short-term price movements. This period has proven to be no
exception, so far:

(For those unfamiliar: the blue line above shows months of
inventory, inverted to make the relationship clearer — lower
inventory is represented by the line moving higher. The red line is
monthly price changes.)

Here are a few price charts. I should convert these to log scale now
that they are so long-term… in any case, the recent price surge is
clearly more than the typical summer strength.

Here’s summary table:

The market is clearly getting a big boost from low interest rates
and the “COVID dynamic” (where people want to buy/upgrade, but
nobody wants to sell). It’s worth keeping in mind that both these
things are (hopefully) temporary. Once life and the economy return
to normal, both rates and the housing supply/demand dynamics should
go back to where they were before.

One thing that might be permanent
is an increased bias towards home ownership if a lot of people start
to permanently work from home. That would be good for housing
demand, but I have a feeling that the rates+COVID dynamic thing is a
much bigger factor. And those will, at some point, be reversed. For
now, though, the market is super tight and prices are responding
accordingly.