An Explainer: Inventory
While the Oxford dictionary defines inventory as "all the goods in a shop", this has gained a slightly different meaning as far as real estate is concerned. An inventory in the real estate parlance means the unsold housing units in a given stock.
In the past couple of years, a slowdown in the real estate sector led to a low volume of home sales. Owing to this, real estate developers across the country have not been able to push sales as expected. As a result, they are sitting on a huge unsold housing stock. In the world of real estate, this housing is stock is known as inventory. The swell in inventory is also indicative of how a particular housing market has performed in a specific time period — the higher the inventory, the lower the sales.
A huge inventory stock would also indicate developers would exercise caution in launching new projects, as their earlier investments remain stuck. For homebuyers, however, this could be a benefitting scenario. At a time when developers have a huge unsold housing stock, property prices are likely to decline. Major real estate markets in India saw a price correction in the past couple of years owing to this particular reason.