Quote:
Originally Posted by Kavvy
So I think I understand why he posted this. He is trying to show that the total sales is actually up compared to historical values, whereas if prices were about to take a downturn, total sales should be down (the more sales, the more it drives prices up).
But it is a horribly skewed stat, almost guaranteed to show a "positive real estate market" no matter the conditions for two reasons:
1. He should of taken the average total sales over the last 29 years, not just the value from 29 years ago compared to today
2. This value ignores population and inventory growth. As the city grows, this number needs to go up in order to just maintain prices. A very rough correlation would say that was population increases, this number needs to increase by the same percentage to maintain prices. Since population has increased by a whole lot more then 6.73 % in the last 29 years, I would argue that this stat actually shows quite the bearish market coming this summer.
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Pretty clear that he is cherrypicking stats to misrepresent the overall market.
In the end we just need to look at two things, sales and inventory. Supply and demand. Both are trending in the wrong direction. Market will adjust accordingly.
All these other tidbits like home prices up from a month ago are irrelevant. They just show that marginal buyers (first timers) were outnumbered by more well to do ones. Is that a good thing?
How many vacant homes on the market? About 25%. That's the scariest stat of them all. Musical chairs gone wrong.