The Temperature of the Market
Comparing today’s inventory and demand levels to prior years reveals the accurate temperature and trends of the current market. Even with low demand, the low inventory has paved the way for a very hot Spring Market.
In planning the day, there are plenty of weather apps and websites to try to figure out the temperature. Based on the information, it may be helpful to pack a jacket or wear shorts. Unfortunately, with all the technology, weather forecasting is not an exact science and often misses the temperature by a mile. It is better to look at a good old-fashioned outdoor thermometer, or the “outside temperature” reading in the car, to gauge the day’s weather accurately.
Similarly, there is no shortage of “economic experts” who look at housing data and attempt to measure the current temperature of the market. Yet, many of these experts are not “housing analysts” by trade and miss the temperature of housing by a mile, unfamiliar with the nuances in the data. Their economic expertise focuses on a different sector of the economy. To accurately determine housing’s strength and its actual temperature, it is best to turn to the data, inventory versus demand.
Excerpt taken from an article by Steven Thomas.
