Sale to list ratio, for-sale inventory, sale count, and housing value

Xingrui Zhang, Yunpeng Wang, Eunhwa Yang, Shuai Xu and Yihang Yu

International Journal of Housing Markets and Analysis, 2023, vol. 18, issue 2, 416-432

Abstract: Purpose - The purpose of the paper is twofold: first, to observe the relationship between sale to list ratio (SLR)/ for-sale inventory (FSI)/ sale count nowcast (SCN) and real/nominal housing value, and second, to produce a handbook of empirical evidence that can serve as a foundation for future research on this topic. Design/methodology/approach - This paper broadly compiles empirical evidence, using three of the most common causality tests in the field of housing economics. The analysis methods include lagged Pearson correlation test, Granger causality test and cointegration test. Findings - Causal relationships were observed between SLR/FSI/SCN and both nominal and real housing values. SLR and SCN showed positive long-term correlations with housing value, whereas FSI had a negative correlation. Adjusting the housing value with the Consumer Price Index (CPI) to derive real housing values could potentially alter the direction of the causal relationships. It is crucial to distinguish the long-term relationship from temporal dynamics, as FSI displayed a positive immediate impulse–response relationship with nominal housing price despite the negative long-term correlation. Originality/value - SLR/FSI/SCN are housing market parameters that have only recently begun to be documented and have seen little use in research. So far, housing market research has revolved around traditional macroeconomic indicators such as unemployment rate. To the best of the authors’ knowledge, this study is one of the first studies that introduce these three parameters into housing market research.

Keywords: Sale to list ratio; For-sale inventory; Sale count/trading volume; Housing value; United States (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijhmap:ijhma-08-2023-0113

DOI: 10.1108/IJHMA-08-2023-0113

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