Supply vs demand

Jonathan Miller, analytical guru and CNBC regular, says that looking at sales transactions is only half the story of a market's performance.  One should look at the absorption rate because it tells the whole supply vs demand story.



Manhattan's absorption rate is the same level as during beginning of the decade.  It's a good thing because it means there's demand for the new properties hitting the market.  In contrast, the US's absorption rate is 2.5X higher than beginning of the decade.  This means there's not enough people buying the new housing built.

Note the spike was the Lehman bust which is now back to normal.  Here's the absorption rate article Manhattan Absorbs The Turkey if you care to read the details.

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