real estate timing – market indicators – new home permits
In continuing with the series on looking at market indicators and how they affect real estate timing I want to look at new home building permits today.
New home building permits are the number of permits pulled in an MSA each month for the construction of new single family homes. This is how we gauge demand for new construction housing in real estate markets. As orders for new homes go up real estate markets respond and builders start building more homes. The addition of new construction housing stock in a real estate market reflects the overall performance of the market. If the demand for housing stock is growing we would see it reflected in the real estate timing market momentum charts for that MSA and the momentum calculation would be above the zero line. If the demand for new construction housing is shrinking we would see the real estate timing chart’s market momentum calculation drop.
When you look at the market momentum charts for multiple market indicators you can see the direct correlation between the market momentum and the values of homes in the MSA. Take a look at this video on real estate market indicators, titled Real Estate Investing – How Market Indicators Work, to see examples of how we look at real estate trends in market momentum and how the real estate timing charts tell us When to Buy and When to Sell