After posting my entry
about house-price futures yesterday, a loyal reader tipped me off to another
entity dealing in such things here in the US: Radar
Logic’s RPX. Again, I have no idea how liquid these things are, but the
one thing they do have is a historical
data section on their website, where you can chart price per square foot
in any of 25 different metropolitan areas from Atlanta to Washington. The price
charts tend to be pretty much what you might expect: a long climb for most of
the decade, and then a turnaround more recently. But underneath the price chart
is something they call the "transaction count", which measures not
the price per square foot but the number of transactions taking place in the
market at that time. Here’s the chart for Miami:
Miami’s price per square foot hit a high of $207.94 in June 2006; it’s now
retreated almost 10% to $187.40, which is the same as its level in October 2005.
But back in October 2005, as you can see, the market was booming, with the transaction
count up around the 10,000 level; it peaked somewhere over 12,000. Today, the
transaction count is closer to 3,000, and falling. They’re never going to clear
their excess inventory at that rate.
Oh, and in case you find such datapoints useful, the one-year forward average
national house price is about 11.25% lower than the current price of $262.86
per square foot.