Mar. 29, 2009 - Home Prices "Bottom" - volume of sales

Before we talk about volume sold...understand that unlike the stock market and its ups and downs and peak and bottom, to a large extent the housing market is more a story of what is NOT sold, vs. the "volume" of those that have sold. That's why "the bottom" is/was like watching a bunch of people jump in front of a train. As you look at the volume chart below, keep in mind that in this specific market segment there are currently 543 properties on market that are not sold.

Calling "the bottom" is like saying "it can't get worse than "this". "This" as to volume and "this" as to price, are not necessarily one in the same, as prices do not often or always coincide with volume statistics. My bottom call was about prices and not volume, but let's add 38 as the "bottom" as to volume and 13% in the previous post as "bottom" with regard to % sold in 30 days or less.

There has been a lot of discussion around the internet about "spring bounce" periods, as if "spring bounce" doesn't count. Spring bounce is and will always be a huge part of the real estate appreciation factor. If the housing market "goes up" 12% in a year, you can count on a majority of that appreciation being attributable to the months from March through September.  So comments like "oh, that's ONLY "spring bounce" are...well, silly.

An increasing market will have taller low points, a decreasing market will have shorter high periods and deeper low points. "bottom" will be the lowest of the low periods and 38 moving forward should be "the bottom" as we look back at it in months and years to come.

An analogy for those who follow the Dow might be that 181 in the graph above represents 14,000+ on the Dow and 38 represents, well...jury's still out on that one. I'm not as convinced that we have seen the Dow's low point at just under 6,500, as I am that we are seeing the low point as to volume of home sales in this market segement at 38.

There is much more to this story as "bottom" relates to sold vs. not sold. We will discuss that when we get to the subsequent and likely final post as to prices But first we will look at the % variance between asking prices and sold prices, as "bottom" was a double whammy effect of lower asking prices and widening % variance of asking to sold prices.

As to this post and this graph, the last few days of a month often hold a large % of the number of sales.  Since Tuesday is the last day of the month, and reflecting those sales can take a week or so beyond that, let's just say I am positive that closed sales for the month of March will exceed the tail end of this graph, which is already up. There are already 46 closings in March reflected for this market segment, so the final count will clearly by UP from the final position in the graph above.

(required disclosure) stats hand compiled by ARDELL and not compiled, published or verified by NWMLS.