When the line is above zero, sales volume is increasing, when it is below zero, it is shrinking when compared to the same month the year previous. What we see is the subprime meldown followed by job losses. The job losses have stabilized (see below chart) so sales are leveling out. However, government induced mania has caused two massive surges in sales in the last year. First with the head-fake tax-credit expiration in December 2009 and then with the final expiration in April 2010. It's important to note that the tax-credit rule said that buyers had to be under contract by the end of April which would have put their sales reported in May. However, our May sales were only 6% above last year. It appears that most of the folks that purchased homes did it in March and April. I think June closings will be lackluster.
Also, since real estate prices are income driven, I wanted to see how unemployment was holding up in Weber County. We appear to be peaking right now:
What this peaking in unemployment means (unless there is an apocalyptic loss of jobs) is that real estate values have corrected and are likely bottoming. There are a couple other factors that may affect prices like mortgage rates and wage growth/shrinkage, but for the most part employment is the biggest factor affecting price. So, barring some wild swing in rates (not likely) and/or huge swings in wages (also unlikely) then prices have stabilized and will likely improve along side job numbers improving.
Thus, this stability makes for a good flipping environment since entry price points and exit price points are fairly predictable now.
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