Divining the Direction of Housing Prices,
One Deal (and Tick) at a Time

Both the stock and housing markets have “upticks” and “down ticks.”

The difference is that, in the stock market, ticks are measured in pennies, whereas in residential real estate, they’re measured in thousands — or even tens of thousands — of dollars.

For the uninitiated, a “tick” is simply the difference between the current selling price and the last selling price.

So, if the last trade for Microsoft stock was for 1,000 shares at $25.62, and the trade before that was for 500 shares at $25.61, it’s selling at an uptick.

In the housing market, the equivalent is a home that sells faster, at a higher price, than its peers (“Comp’s,” or comparable sold properties).

Finger Spreadsheet to the Wind

What difference does any of that make?

While you can’t tell where the broader housing market is going, at least at the “micro” or neighborhood level, it’s possible to tell whether housing prices are headed up or down at the moment by looking at the direction of the “tick’s.”

In fact, that’s how good Realtors price: ¬†they know the inventory in a given neighborhood cold, and can tell whether the trend is up or down (news flash: clients don’t always heed their Realtors’ advice).

If the last few ticks have been up, the next homeowner has leeway to price more aggressively; down, the reverse.

I’d go even further:¬† three consecutive “upticks” signals a rising market — for homes in a particular neighborhood.

Notwithstanding the latest, gloomy Case-Shiller numbers (for January, covering the Twin Cities market as a whole), in several local neighborhoods this Spring, there are now a string of sales at consecutively higher prices.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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