Inventory is on the Rise... Is that Good or Bad?

You have probably heard on TV or Radio have our Inventory has been Rising.

But Exactly How Much and Why?

In the Graph directly below, the Orange dotted Line represents that Months Inventory.

The Blue Bars below represent the Number of Months of Inventory, at the current Rate of Absorption.

The Rate of Absorption is the number of Sales that month.

For example... We have close to 7,000 Homes on the Market and we Sell about 3,500 a Month,

meaning we have 2 Months worth of Inventory.

According to the Experts ( people who's opinion is supposed to mean something ),

A Healthy Real Estate Market should have around 3 months of Inventory.

Less than 3 is considered a Sellers Market.

More than 3 is considered a Buyers Market.

We have also heard about all the Shadow Inventory of Foreclosures 

that are supposed to be being dumped on our Market.

There are 637 REO's of the 8,728 Listings or 7.2% Bank Owned

FYI... Short Sales make 14.6 % of the Active Listings.

In my opinion...

The reason Inventory is Rising is that Prices have gone up. (see Graph 2)

(1) Investors are backing out of Las Vegas because their Margins are shrinking.

(2) People finally have Equity in their Homes and want to Cash-In.

(3) The Timing.  Real Estate is cyclical. The Summer Price Surge has Sellers trying to Cash-In.

The Fall Drop Off means that people are not buying as Fast as they were just a couple of months ago.

People are concerned that there will be another a Housing Bubble / Burst.

We all still have a Bad Taste in our mouths from the last one,

and the Media loves to grab our attention with bad news.

Looking at 2 graphs below, I don't see anything to give me cause for concern.