Filtering.

Courtesy AustinContrarian  Thu, 06/26/2008 - 11:59am

If you don't understand filtering, you don't understand housing markets.  Because lots of people plainly do not understand filtering, here's my attempt at an explanation:

When property values rise, low-quality housing "filters up" to the high-quality housing sub-market.  The reason is that rising rents encourage landlords to invest more in the property.  When property values fall, high-quality housing "filters down" to the low-quality housing sub-market.  The reason is that falling rents encourage landlords to invest less in property.  The key in either...


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