Tuesday, August 28, 2012

It's the demographics, stupid

Analysts continue to base their forecasts for the US housing market on the economic conditions. It no longer works (see discussion). Rephrasing James Carville's quote, "it's the demographics, stupid".

Case-Shiller Comp-20 housing index MoM vs. forecast (Bloomberg)

USA Today: - The situation is "being created by smaller inventories" of homes for sale, said Everett King, president of ERA King Real Estate in Birmingham. Pent-up demand and fewer homes on the market are letting sellers charge about 5% more than six months ago, he said. "Anything between $350,000 and $400,000 just goes at the asking price."

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