Thursday, March 15, 2012

Housing: Seasonality for Searches, Starts, Sales and Prices

by Bill McBride on 3/15/2012 08:25:00 PM

Jed Kolko, Trulia's chief economist writes about housing seasonality today: Springtime for Housing

The housing market rides the seasons. Year in and year out, market activity has predictable ups and downs. Sometimes those seasonal patterns are hard to see when longer-term trends (like plummeting housing prices) or one-off events (like the homebuyer tax credit) drive movements in prices, sales and other housing indicators. But seasonal patterns are there, even when they’re beneath the surface.
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In this post, I look at five measures of housing activity: search activity, asking prices, new construction starts, existing home sales and housing inventory.
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The chart below shows that sales are typically 29% above their annual average in June and 31% below their annual average in January. Construction starts also swing 25% above and below their annual average over the year. ... Search activity rises 12% above its annual average in March. But inventories stay within 10% of their annual average every month, and asking prices stay within 5% of their annual average every month.
Trulia Seasonality Click on graph for larger image.

This is one of three graphics in Kolko's post. Note that Kolko is using asking prices, and not a repeat sales index like Case-Shiller.

This shows housing is definitely seasonal, especially starts, sales and searches. The other graphics show when activity is high and low for each measure (searches peak in March and stay high through August), and when prices peak by region (earlier in the south, later in the north).

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