Pebble Beach Market Action Index (Sept 2007)

Home prices are a function of supply and demand, and market conditions can be characterized by analyzing those factors. the Market Action Index is a tool for measuring the balance between supply and demand using a statistical function of the current rate of sale versus current inventory. It takes into account the number of homes on the market, how fast they are being sold, as well as price drops.

If the Market Action Index falls below 30 and remains there, prices are likely in for a downward correction.

If the Index is above 30 it typically indicates a “Seller’s Market” because demand is high enough to quickly absorb available supply. And, prices will usually rise as a result.