Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (43780)	11/1/2005 11:48:22 PM
From: GraceZ	Respond to of 306849

wrong. you are equating turnover rate with supply being withheld and calling it "proof". in the real world we can't just change the names of things and pretend they are the same thing like this. How would you measure supply of existing homes for sale if not the ratio of those that sold to those that exist? The turnover ratio is the inverse measure of those homes that are being "withheld" from the market in any given year. clearly supply is being withheld from the market Yes, last year it was around 93.5% of the existing single family homes and condos that were withheld from the market. It's a wonder anyone could survive selling real estate. this population growth theory is very popular in Clownifornia and among housing bubble apologists. but unfortunately it is a poor explanation of skyrocketing prices. Persistent price rises, over time, above the rate of inflation, are usually a pretty good indicator that there is an imbalance between supply and demand (how ever that demand is created), that something is getting more scarce. You can argue that the recent price appreciation has a lot more to do with the falling cost of mortgage money creating surging demand, but it did it in an environment which has had a gap between the trend in new household formation and new building for a few decades. CA has had housing prices that have risen in a trend above the rate of inflation and incomes for over 50 years. I have little doubt I'll have this same conversation 15 years from now as I had it 15 years ago.