Last time, I ended the column with these words: “I’m not going to say it’s raining. But I see quite a few dark clouds around.” A rather sharp decline in year-over-year sales was the driver of that statement.

This past week we had two articles in about this phenomenon – one general and the other referring to southern California as a bellwether. Both articles stated that overall sales were falling, and that inventories – particularly at lower price points – were declining, as well.

So rather than look at prices this time, I decided I would look at recent inventory trends to see whether similar things were happening here. To see whether there was a valuation component to it, I looked at inventory in total Wilton Manors (all three neighborhoods) as well as in North Andrews Gardens, probably the most desirable entry/mid market neighborhood east of I-95 (and also popular as an Island City alternative).

The results are shown in the chart here. I think you will find them enlightening. First, inventory has been generally falling in both areas over the last several years (with a few blips here and there). At present, WilMa inventory (relative to anticipated sales) is at its lowest point since late 2013. Inventory in North Andrews Gardens is at its lowest point in six years.

Also note that inventory in North Andrews Gardens has tracked somewhat below Wilton’s for several years now. This is something I noted in last year’s Yearbook. In general, inventory as of last September increased by one month for every $100,000 of valuation (starting from a base level).

When I complete the 2018 Yearbook in October, I will see if that relationship still holds. I am particularly interested in inventory levels in the next-higher neighborhoods from Wilton (Victoria Park, Coral Ridge dry lots, possibly some waterfront areas in Pompano). For now, I concur with CNBC and can say that the combination of falling sales, lower inventory and flattening prices merits closer analysis.

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