The Market Clearing Price? Correction or Crash.

Theories of Value and Markets are disagreeable environments in which as many practitioners will find as many different opinions. Each will have their pet spin upon a particular School of thought and the expert's are often as segmented as the Markets they purport to "Predict".
Prediction is of course a very difficult thing , especially predictions about the future. Rather than make any hard and fast predictions I have applied the Logic of the Market Clearing price. That is a level below which Prices would not sensibly fall, as prices at a certain level would represent a price which is below the Economic Replacement cost of what is being sold.

---

---

The above graphic and the following Table provide us with our Average Home to which we apply the Average Economic Replacement cost price to arrive at our notional Return to Mean average price. ( This is arbitrarily arrived at, just applying the artistic side of "Valuation Feel" based upon the key variables according to one's own  Taste and Opinion . This is our own feel for the direction of the market and what we consider to be a middle of the road logical approach to where logically an overvalued market would settle based upon an economic replacement cost argument.

---

Link to Spreadsheet

There is actually a higher chance of stagnation. Volumes may remain low for an extended period. Also the segmentation regionally for all metrics is also a big factor that defies generalisation. The analysis needs to take in the whole cycle and the full set of key variables.

— Real-Estate Land Development Limited (@RealEstateLand3) May 30, 2023

I have completed a comprehensive analysis of affordability ratios, Land Prices, Build costs and segmented housing stock , Household wealth, Incomes across regions and wealth percentileshttps://t.co/WcVtlhv0RR pic.twitter.com/hlut10wlIR

— Real-Estate Land Development Limited (@RealEstateLand3) May 31, 2023

There are a host of weights which could be ascribed to different variables. In the low Volume environment with High Levels of equity wealth prices will be stickier on the way down which is why a crash is much less likely than a substantial correction.

— Real-Estate Land Development Limited (@RealEstateLand3) May 31, 2023

This is a brief and simplified summary of our own commercial analysis of the market. @homeatix we build to order according to customer demand which is naturally segmented.https://t.co/CaNVOe47co pic.twitter.com/O7RidJnBhd

— Real-Estate Land Development Limited (@RealEstateLand3) May 31, 2023