Real Estate is just like the DOM. You've got Bids and Offers for houses of comparable features. The long biases stem for the fact that you are more likely to hold on to the asset rather than take a sizeable loss. The majority of people do not sell their house for less than what they bought it at. Sellers would rather hold on to their house than sell it below what they bought it at since the house is doing more than just the usual "increase in value" (ie. roof over one's head). The flip side is that someone bidding is typically committed to buying a place. Since a decision to push forward with buying induces cost above and beyond the price of a house, you don't find many "fake bids". In other words, the bid size is largely filled with participants intending to buy at some current fair value. Most individuals do not think about inflation and/or interest adjusted returns of their house when they sell it. It is normally a matter of "is the price I am selling at higher than the price I bought it at?"... On the flip side, a seller will only sell below what they buy it at if and only if they must immediately vacate (ie more or less, a mkt sell order). If there is no immediate emergency, the seller is more inclined to hold on to the asset or gradually reduce the offer price as long as the reduced price is above the price at which they bought it at... Hence, the long biase. The myth of course is that prices increase at 5% annually which is not true since housing prices cannot compound year after year, otherwise, a house would be just another alternative, money-making machine. Interestingly enough, the cascading stops is the whole foreclosure where interest rates make a once affordable house unaffordable, a pseudo shake out of those who were already pushing the limits of what they could truly afford...
REgards,
MAK
