I was sifting through the data that I have on the local real estate market here in the Inland Empire and I started to wonder when the homes that were on the market were built. So I put together some graphs. It turns out that the homes that are on the market were most commonly (the mode for you statisticians) built in 2005.
This first graph shows the number of listings on 7/30/2008 by the year built. I kept the vertical axis set to 120 so that it was easier to compare the graphs.
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My data does not indicate anything in particular. However, it does appear that the year that the homes that are on the market were built tend to have peaks and valleys. For example, a sample of data taken on March 30, 2009 with a 30 day window indicates that there is a peak of homes built in 1979, then a relative steady pace from 1985-1989 with a drop in 1987, then a rise again until we peak at 2005.
Keep in mind that all of the years shown are for homes that were on the market during the sample period. So this data does not represent any correlation with the number of homes built during a given year. It represents a sample of listings with a change in status within 30 days of the sample period.
This second graph show the number of listings by year built on 6/29/2009.
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Why would there be such a pattern of peaks and valleys. I sampled the data set for several different months. I went as far back as July 30, 2008. The actual data is a little different, but the peaks and valleys are roughly the same.
So the data begs the question. Why are homes built in 1987 less likely to be listed than homes built in 1988? Why are so many homes that are built in 2005 on the market?
I suspect, but can't seem to find anything to correlate the data, that it may be related to historical housing booms and busts. It is my theory that during the peak of the housing boom that the quality of construction may decline because builders are under pressure to complete projects at an ever increasing pace to keep up with demand. As the boom turns to bust, they are free to spend "quality time" building a structure.
Another theory may be purely related to the number homes built during a particular year. If lots of homes were built during 1986, but not so many in 1987, then it stands to reason that an equal percentage of each year will result in a higher count during boom years and a smaller number during less that active years. Lots of homes were built in 2005. During the period of 2006-2009 less homes were built. So perhaps the data is just a reflection of the building cycle?
Take a look at the two graphs. What is your theory on what the data means?
Note: The data for these graphs were all in the 92336 area code. If a larger geographical area is sampled, then the data may be more uniform.
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