Here is the year over year data in Existing For Sale Home inventory. If there is too much of anything then it is this. That so much of the commentariat lives in pre-existing owner-occupied homes I think skews perception.

Converting rentals into condos makes puts more owner-occupied units on the market but does nothing to increase housing supply, for example. And, though we did have a buldge in single family construction during the 2000s we had a collapse in multifamily and mobile homes. Both are traditionally a significant source of housing for many Americans.

And, of course even single family built for sale has been in the toilet for going on 5 years.

However, because there are a back-log of existing single family homes for sale it can feel to a certain segment of society like there are too many homes.

Yet, even that is starting to deteriorate rapidly. From Calculated Risk.

The integral under the redline will turn negative in the next year or so at this rate. By many accounts, however, it overestimates the inventory. The shorter lived blue line is likely to have given better estimates. Thus we could be very well approaching a negative integral by the end on 2011.

You can make an argument that the boom in home construction was unsustainable, though I think that argument is fairly weak. I don’t see how anyone can consider the collapse in home construction sustainable. Not, unless we are approaching a serious paradigm shift in how Americans live.