As you can see from the chart, home sales plummeted in 2008 and meandered downward through 2010. Our trendline bottomed in 2011 and we have trended upwards ever since. Unlike 2010 which was marred by government interference, the market seems to have made a reversal direction for sales numbers. This time though, there are no major legislative gimmicks to goose the market upward. We finally appear to be out of the abyss we had fallen into.
To illustrate this better, let's take a look at sales on a month-to-month comparison. Queue chart please:
Notice that compared to last year, we have seen solid gains in sales volume. With inventories being so low, this portends price stabilization in the near future.
I anticipate that we bottomed out in prices around the beginning of the year. Once all the REO and scratch-and-dent inventory is cleared from the market, we should start to see prices edge upwards.
The market dynamics seem reminiscent of 2003 which was a year of increased sales volume. However, it took a whole year before prices started to increase. I don't expect prices to increase nearly as much as they did back then but tracking with inflation may be in the cards. Let's watch and see.
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