Supply and Demand Falling in Lockstep
As the market has cooled, fewer transactions have occurred at the same time that the number of listings has been falling, according to this graph prepared by Miller Samuel. Presumably the former is influencing the latter, but it’s impossible to attribute causality for sure. For a larger view of the chart, click here.
As the market has cooled, fewer transactions have occurred at the same time that the number of listings has been falling, according to this graph prepared by Miller Samuel. Presumably the former is influencing the latter, but it’s impossible to attribute causality for sure. For a larger view of the chart, click here.
The two lines have already converged. If you redraw the graph so both indexes are equal (3000 = 3000 on both sides, for example) the lines track each other closely all along. Inventory is only slightly higher than sales.
“Note as well that different scales (left axis v. right axis) are used for inventory and sales (inventory = 6000, sales = 1800).”
Excellent observation. So an 8,000 drop (-80%) from the peak in sales and a 1,000 drop (-25%) in listings since records were taken (NOT from the peak where ever that was). Lockstep? Nice spin.
“The “demand” side of the equation (i.e., NYC residents looking for a place to live)”
Demand = QUALIFIED NYC residents looking for a place to live. Deduct the window shoppers.
“sellers who don’t need to sell (most sellers)…”
PURE speculation (based on what?). Do you have the balance sheet of all sellers in front of you?
***Bid half off peak comps***
Wasder, is this true? In areas such as Fort Greene, it seems they are about equal.)—Mopar as we know many people on this board consider where I live to be less than prime. But as to the actual factual info here I don’t know. I don’t think I could rent as much space as I have now for the money I pay but this is not a scientific position.
“Source: LIBOR, ACRIS”
LIBOR = Long Island Board of Realtors = MSLI.com = Weak coverage of listings (read SUPPLY) in Brooklyn
ACRIS = Automated City Register Information System = Sales (DEMAND) only = No listings (read SUPPLY) at all
I believe the demand curve because it’s from ACRIS. The supply curve from a *Long Island Listing Service? Not so much.
*Yeah I know Brooklyn is technically a part of LI but do a “LIBOR” search between $1M and $5M and see how many brownstones come up.
Nice try though (very sneaky).
***Bid half off peak comps***
as explained before – sideliners will not see firesales. developers will rent out, sellers who don’t need to sell (most sellers) won’t. this is not detroit or cleveland.
QED: The day of the cocky slumlord is over. You know who you are.
Isn’t this graph typical of market turning points? That is, doesn’t a decrease in transactions generally precede a market correction, just before the neediest sellers finally cave and the buyers on sidelines waiting for price decreases finally jump back in?
I think maybe ownership and rental prices are already pretty close. Also, for a couple with two incomes, the difference between 1600 and 2000 is not that great, if space is not an issue.
(The three bedroom apts are plenty spacious.)
“Math geniuses, what do you make of this?”
Bad neighborhoods are cheap.