Stock on market and growth

When there is an increase or decrease in stock on the market does that normally correspond with an increase or decrease in prices? Ie when there is a boom are there relatively more properties being sold? If so why?

 

In Darwin it corresponded to a drop in prices. But there was a lag of 12-18 months between peak listings and asking prices dropping.

Not sure about different markets though.

 

Its the increase or decrease in credit availability/borrowing capacity that you should be studying for the answer... you'll find that price movements since deregulation in the late 80's track borrowing capacity pretty much exactly.

And you'll also find that since the regulatory intervention last year, prices are being affected by that as well

 

I believe an increase or decrease in stock numbers by itself is not a reliable indication of where prices are going, however, when reviewing a trend taking into account changes in the number of listings, number of sales and prices, then you get a much better idea of where the market may be at. For example:

• when the number of listings are falling, number of sales are rising and prices are rising, then the market is booming;
• when the number of listings are rising, number of sales are falling and prices are rising, then the market may be about to correct; or
• when the number of listings are rising, number of sales are rising, and prices are falling, then the market has started its downturn.

I recall reading the above in a book and there are a few other combinations between the number of listings, sales and prices which indicate different stages of the property cycle. I can look up the author and title of the book if your interested?

 

increase or decrease in stock is what will determine where the market is going..... supply vs demand

what influences this can be finance tightening, market sentiment changing, interest rate, immigration, economy etc

also look at number of days on the market, quick turnover can indicate movement, markets falling/rising

I like to contact agents to find out specifics, interest, stock, demand, number of offers on properties etc

I think

 

a boom is when there is not enough stock to meet demand, multiple offers, everyone fighting for the same cheese