A real estate consumption remodel

Mood of the Market

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So often, analysts focus on what buyers are thinking and doing as a key barometer of consumer confidence and the state of the economy. In real estate, however, everyone who makes a monthly mortgage payment is technically "consuming" housing, so it makes sense to pay attention to what homeowners and would-be sellers are doing and not doing, too. For example, one group whose decision-making vis-à-vis their homes provides interesting insight into (and impacts on) the housing market, is the homeowners who would have sold their homes and moved to a bigger, better one in the last couple of years had the market not been in crisis. The market has caused many of these would-be sellers to do what I like to call "bloom where they're planted." Selling now seems infeasible to many of them, as the decline in home values has caused them to either (a) owe more than their home is worth on today's market, or (b) have less equity than they expected to have at this point i...