The turmoil in the housing markets around the country has caused lots of trouble for home sellers, home buyers and home sellers alike. It’s basic supply and demand, really. At any given time, the trend line for housing prices is determined by supply of housing and demand for buyers.
How could an investor read the signs to tell which way the market is moving?
Housing supplies are perhaps the easiest quantity to measure. Physically, it is not difficult to count the number of single family homes and multi-family homes in an area. Most metropolitan statistical areas have a pretty good handle on the inventory. Corrections must be made for demolitions and new home construction but, again, that is not terribly difficult.
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