Sales in December were down 3.5% from the previous December.The Realtors also reported that sales were up 6.5% month over month, and sales for all of 2008 were down 13.1% compared with 2007.
About 45% of the transactions in December were considered distress sales, either a short sale or a home in foreclosure, the Realtors said. Many foreclosure sales are handled outside the Realtors' system and are not reported by the Realtors.
"Rising foreclosures and the large inventory overhang continue to exert downward pressure on prices," wrote Anna Piretti, an economist for BNP Paribas. ...
The median sales price fell to $175,400 in December, down a record 15.3% compared with a year earlier. ...
The price decline is likely the largest since the Great Depression in the 1930s, according to Lawrence Yun, chief economist for the trade group.
I believe that year-over-year numbers are better than month-over-month numbers at showing the sustained trend, because month-over-month numbers are too volatile. Also, the Realtors' data for price changes are not very reliable, because they don't control for the changing mix of houses sold. The S&P/Case-Shiller home price indices (which should get released today) are more reliable for measuring price changes.
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Year over year numbers don't get rid of month to month volitility. If this month is 10% below the trendline, it is 10% lower than the trendline, whether you compare it with last month or a month from a year ago.
ReplyDeleteWhat YoY comparisons do is eliminate the need for seasonal adjustment, which can magnify (or minimize) the effect of sales being shifted from one month to another.
--Jim A.
Expect realtors to use whichever number creates a better story for them. If month-to-month is an increase even if year-to-year is down, they will use month-to-month. If month-to-month is down and year-to-year is up, they will use year-to-year and not include month-to-month numbers.
ReplyDeleteCaveat emptor.
The sad part is that its down either way.
ReplyDeleteI can't comment for fear of hurting feelings from coast to coast. My friends, let me know if you need a hug and I'll be right over.
ReplyDelete==John
The million dollar question is: will 2009 sales be up or down from 2008 on a whole???
ReplyDeleteMan I hope up!
Rebecca
thats really not bad considering all of that bad news in the media
ReplyDelete"Expect realtors to use whichever number creates a better story for them. If month-to-month is an increase even if year-to-year is down, they will use month-to-month. If month-to-month is down and year-to-year is up, they will use year-to-year and not include month-to-month numbers.
ReplyDeleteCaveat emptor."
Same thing with Mr. Mortgage who used to use YOY to portend doom, but when YOY sales increased this fall, switched to MOM to portend doom., and now that MOM sales are up, has switched back to YOY numbers to portend doom.