A decade ago, housing experts warned — incorrectly, it turns out — of a Tsunami of “shadow” inventory waiting to flood the then-moribund housing market, and drag prices still lower. See, “Barry Ritholtz Issues Mea Culpa on Housing.” The source of all those homes? Banks sitting on millions of foreclosures nationally. Fortunately, it never happened: banks bundled...Read More
Structural, Not Psychological Explanation The years-long shortage of housing inventory has been a head-scratcher for many real estate experts (including this one). According to Econ 101, rising prices eventually elicit more supply, which cools off prices, which in turn reestablishes market equilibrium. Except that hasn’t happened the last few years. If anything, the shortage of...Read More
Question: How Fast (or Slow) is the Housing Market? “Absorption rate”: the rate at which available homes are sold in a specific real estate market during a given time period. It is calculated by dividing the average number of sales per month by the total number of available homes. –Investopedia.com Assuming the standard definition of...Read More
Fewer Showings — But a Silver Lining, Too So far this Fall, the word amongst active listing agents (representing Sellers) is that showings are way down (that’s been my experience, too). If you want a benign explanation, blame it on the gorgeous Fall the Twin Cities has been enjoying thus far, keeping Buyers’ focus elsewhere...Read More
Quality > Quantity Buyers (at Least Until After Labor Day) The Holidays . . . the post-Holidays . . . any stretch in Winter when it’s well below zero. And mid-to-late August. What do all of those periods have in common? They’re all predictably slow for housing transactions in the Twin Cities. Late Summer Slow-Down...Read More
From a Seller’s to a Buyer’s Market? The catalyst(s) and pace may vary, but the dynamics of a housing market shift — most recently from a Seller’s market to a (nascent) Buyer’s market — are unvarying. And that’s regardless of locale or calendar (i.e., it describes Las Vegas 2007 as well as Orange County in...Read More
