5.34 million existing homes were sold in 2019.
5.6 million were sold in 2020.
6.1 million were sold in 2021.

An increase of 14% in three years.

$318,000 was the median home price sold in 2019.
$423,000 was the median in 2021.

A 33% increase.

Now, looking at a crashing market, the 2000s.

7.08 million existing homes were sold in 2005.
6.52 million in 2006.
5.02 million in 2007.
4.12 million in 2008.

A 41% drop in houses sold.

For prices, the median home price was $241,000 in 2005.
$180,000 in 2008.

A 25.3%.

Writing this, I’m not trying to talk about houses, but instead talk about oil.

$70.68 was the average price of crude oil in 2021.
$88 is the current average.
$113 was the average in May.

The prices are largely associated with Russia, which produces 12% of crude oil globally and is 8% of US imports.

Many people felt ripped off by oil companies and other groups, assuming the price of oil would be reflective of the supply lost. Meaning, prices would only go up 8-12%, which clearly didn’t happen.

The best way to show why big oil wasn’t ripping people off and this is just the way things are is housing.

A market where prices always increase by much higher percentages over the actual increase in homes sold.

It ultimately boils down to supply and demand not being just about percentages, but also about who wants something more.

If ten people want to buy a car and ten cars exist priced at $10,000, each person pays $10,000 for the car. If an eleventh person comes in, that doesn’t mean prices are now $11,000, but could very well go to $12,000, $15,000 or even over $20,000. Whatever it takes to box one person out.

With oil, this was the same, where supply dropped and companies, individuals and other groups paid more to get the amount they needed.

There’s also the obvious point mentioned above that housing prices went down at a lower rate over when sales declined.

This was due to the hold out effect, where many people waited to sell until prices were better, which is a factor that impacts oil as well, where many wells and drilling projects can be frozen for years, waiting for prices to go higher.

This is something which is fairly easy to understand, but felt it was completely ignored this year when people talked about oil.