July Article of the Month: It’s the demand, stupid!

This article series casts a critical eye towards the supply-side paradigm, and posits that in recessionary periods, and particularly during periods of zero-bound interest rates, the real estate recovery is propelled by demand from organic buyer-occupants – the end users of property.

For an analysis of how to nurture demand and obtain more buyers, see Part II of this article series, Where have all the buyers gone? to be published in the August journal.

“If you build or list it (and the government makes cash available) they will come”

To all those vociferous quibblers who proclaim the elixir to the real estate market’s ills is supply, listen up! While sales volume is temporarily propped up by speculators snatching up inventoryProperties available on the market through the multiple listing service (MLS)., this is but a mini-boom in reported sales, and does not paint a picture of market realities one year hence (2013 and beyond as we ride out this bumpy plateauA recovery characterized by a prolonged pattern of short-term increases followed by short-term decreases in home sales volume and pricing, resulting in little or no long-term recovery trend. recovery).