If There Were Truly Growth, Home Builders Would Be Very Busy

by Jeffrey P. Snider
Alhambra Partners

There is one part missing from the narrative sketched out in home resales being subjected to monetary imbalance. It is a compelling explanation for what we find as the most striking aspect of existing home sales, namely the curious lack of depth among sellers. It’s as if despite rising prices there is a seller strike where a significant part of what should be that market just will not participate.

As I outlined a few days ago, the likely explanation is serious stratification. In other words, prices are rising much faster in the more expensive segments leaving those in either starter homes or still the lower tiers unable to make the usual jump that accompanies economic mobility. Because they aren’t buying up, they aren’t selling despite rising prices which are supposed to signal at least stable demand.

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