[quote=sdrealtor]Eugene
I would love to hear more about how you cooked this up and have every confidence you did a reasonably good job. Any chance you could post more about it on your dormant blog?
This is not going to please the permabears whose $500K oceanfront homes rests on you being wrong.
sdr[/quote]
Here’s how it basically went.
We have these general classes of housing units (1-bedroom attached, 2-bedroom attached, …) Census gives us relative numbers of those in the city. 1-bedrooms and studios are supposed to account for 18% of all units, and 2-bedrooms account for another 30%.
But if we look at actual recorded sales over, say, the last month, the structure is different, for example, only 6% of all sales were studios and 1-bedrooms. Why? As I said above, many 1-bedrooms are apartment complexes, university housing, etc, and they are never sold on MLS.
So I just took sales prices and volumes for each category over the last month, modeled each category with a lognormal distribution, and rescaled volumes to get correct total numbers of units.
It looks like as many as 75% of all studios and 1-bedrooms and 40% of attached 2-bedrooms do not participate in the market (they can be rented, but they can’t be purchased).
