What's wrong with this picture
I don't remember ever creating a chart showing the trend lines for inventory and absorption rates so what's wrong with this picture.
I've said for a long time that there are a lot of homes for sale in the Charleston real estate market. But the inventory level follows a very predictable trend line. Inventory generally begins to decline in the last few months of the year and builds once again as we move into the peak spring selling season. The red line represents the number of homes on the market as of the 16th day of each month and you can see that trend very clearly. The blue line represents the absorption rate but notice how it has recently trended sharply higher.
Sales have also always followed a very predictable trend line with sales building during the spring and generally peaking in summer. Sales are indicated by the red line and once again, the absorption rate is indicated by the blue line. The sales curve followed the historical seasonal trend once again this year but at much lower levels.
Because of more sharply declining unit sales, while the inventory has remained fairly steady over the past two years, you can see why the absorption rate has skyrocketed recently.
