Bitcoin Stock-to-Flow Cross Asset Model Works Well on Housing

Peter Harrigan
May 2 · 6 min read
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Try to build here. I dare you.

Housing

I thought it might be fun to test the model on U.S. residential housing. To be clear, this is all based on the regressions run by Plan₿. I’m just plugging numbers into his formula.

The Formula

Plan₿ ran the regression and came up with the following formula:

Floor Space

There were, at the end of 2019, approximately 253.2 billion square feet of housing in the U.S. In a paper from 2015, Moura, Smith and Belzer calculated the total square footage from a combination of U.S. Census Bureau and HUD data. I have updated it to 2019 using Census data.

Value Added

Can we get a better estimate by looking at the dollar value of housing built? After all, if the Zillow estimate is right, it should include all the deferred maintenance, all the variance in location and amenities, all the differences in school districts. It’s price. Price knows all. Meanwhile, we do have the price at which the new housing sold. We’ll have a good, if not perfect, idea of the value of both the stock and the flow.

Fitting the data to the Plan₿ graph

OK. You’ve stuck with me this far. You’ll probably want to see how our estimates look on the graph. And, frankly, you’ve earned it.

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The green circle is U.S. Housing, value added based. The blue circle is U.S. Housing, square footage based. (Stole Plan₿’s graph, added to it.)

Conclusion

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References

Plan₿ Medium Post on Cross Asset Model: https://medium.com/@100trillionUSD/bitcoin-stock-to-flow-cross-asset-model-50d260feed12

Grey Swan Digital

Price Sharing will Change Everything.

Peter Harrigan

Written by

CEO and co-founder, Grey Swan Digital. Co-founder, Sentient Technologies. Former trader at CME, Pacific Exchange.

Grey Swan Digital

Price Sharing will provide all of the benefits of the $500 Trillion derivatives market to people that desperately need them, but are unserved by conventional markets.

Peter Harrigan

Written by

CEO and co-founder, Grey Swan Digital. Co-founder, Sentient Technologies. Former trader at CME, Pacific Exchange.

Grey Swan Digital

Price Sharing will provide all of the benefits of the $500 Trillion derivatives market to people that desperately need them, but are unserved by conventional markets.

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