New York property

The stated reason for the divergence is that owners — both individuals and developers — think that prices are too low, right now, and would rather rent out their apartments for the time being, waiting for a more auspicious time to sell. Which implies that even in Manhattan there’s a significant “shadow inventory” of apartments at the top of the market which aren’t officially on the market but which the owners would still like to sell.

Our favorite New Yorker speaking.

A perceived shortage of real estate five years ago is being requantized by adding liquidity in the transactions of rentals relative to the transactions of sales. The shadow inventory implies higher sales sizes and lower sales rates. Is this effect a short path to equilibrium in new York? Dunno, measure the total entropy of grocery delivery with the total entropy of housing delivery. Or use the smooth approximation and compare housing and food budgets over time. Another measure is the entropy of wages vs the entropy of rentals, that gives coherence of the two channels under the assumption that both are reasonably equilibriated.