May 22, 2018

Listings Could Predict Home Prices

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Listings Could Predict Home Prices

Selling a house can take months, which helps explain why home prices are one of the most lagging of economic indicators. However, due to the growing volumes of price and listing data collected by websites and real estate professionals, economists hope to generate real-time price indices similar to the ones available for more liquid assets, such as stocks. 

As economists mix standard listing information with other data about sellers, they are significantly improving their predictions for what final sales prices will be. This could potentially help home buyers, home builders, and property agents get a better and earlier handle on where prices are headed. 

Economist Paul Carrillo at George Washington University uses a measure of market tightness to forecast home prices. "The idea is that changes in the speed at which real estate sells almost mechanically is going to tell you something about what’s going to happen with home prices," he says. His and others' research come on the heels of similar efforts by Trulia and Zillow that incorporate listing trends into their price outlooks.

Source: "Can Listings Be Used to Predict Home Prices?" The Wall Street Journal (March 4, 2014)

Copyright © 2014 Information Inc.

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