Captain Obvious: Real Estate Price is Inversely Related to Supply.



In his neat blog, Real Estate Mathematics, Enten Eller dissected the mathematical relations between price changes and inventory changes of real estates:

Looking at the bottom red circle, we see that inventory started to fall in month 27 and price started to climb in month 31 — approximately a 4 month lag. At month 47, there was a drop in inventory and in month 50 we see a major jump in price, a 3 month lag. At month 51 there was a jump in inventory (or at least a reporting of such) and in month 57 there was a major drop in price (a 5 month lag). In that same month, there was the start of a run up in inventory rate of change and in month 60, the drop in price rate started to decrease..

In short, rate of price change is lagging inventory by about four months. So what does that say about the next four months of prices in Seattle? They should be pretty flat (that is the same prices as seen a year ago) and may actually start to decline.

Has the bubble burst? Link


Previous Post
Get Neatorama by RSS or email
Next Post
this post? Please email to a friend  +reddit  +del.icio.us  +SU
Posted on August 31, 2006 at 12:08 am by Alex
Category: 1 Other Neat Things



Be The First To Comment!

Neatorama Comment Policy
You don't have to register or login to comment, but it's easier if you do so. We don't censor comment based on your point of view but comments that are abusive, use excessive profanity, or contain off-topic links may get edited or deleted. On some posts, it may take up several minutes for you comment to show up.


Stay updated on the comments in this post with Comment RSS