Fun with charts – It’s about the inventory
I thought it would be interesting to compare some fundamental residential real estate indices for in-town Zip Codes – Downtown, plus 38104 in Midtown, and 38117 in nearer East Memphis. Some call this the Poplar-Walnut Grove corridor.
As you can see, 38103 has had some pretty dramatic price swings over the past couple of years, while Midtown and East Memphis show smoother curves and upward price trends. Inventory has had an obvious impact on prices, as I will discuss later.
Downtown has shown some fluctuation in median prices, but has demonstrated a nice upward trend since summer 2015. Median prices remain stable in Midtown and East Memphis for the Zips chosen.
Inventory tells the story
For the past few years, lower inventories have driven the Memphis market. We have seen low supplies of housing stock, with varying levels of demand, but scarcity, especially in more desirable homes, drives prices. The old story of supply and demand. Here’s the way the inventory lays out for our 3 Zips.
Here is the most interesting graph of the day
Why is Downtown so hot? And why do prices look so volatile? For the last couple of years, prices have responded to inventory. Inventory up, prices down. There is always going to be someone out there who wants to buy that certain house, and when a buyers to wait for the right house to come along, they are likely to make the purchase as soon as possible in order not to lose it.
The Midtown chart for price vs. inventory in kind of interesting too.
Market timing is probably as illusive in real estate as it is in the stock market. I am asked, are we in a buyer’s market or seller’s market? Looking at these charts, one might say low inventory always favors the seller. However, as I have said through the years, all markets are micro. Today’s seller’s market in subdivision A may
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