Thursday, March 26, 2009

A Bit More on Real Estate

Much has been written this week about housing data pointing to a bottom in home prices. On Monday, existing home sales were released and I mentioned that I could see why some would think that a bottom might have been reached. The graph I posted highlighted the fact, however, that housing inventory was still within is recent range despite a dramatic fall in prices.

New home sales were released yesterday and the hoopla reignited because there was an uptick from the previous month. Judging from the below graph, would you be confident in saying the worst was over?

Another blogger made a great point: the increase might not have even happened. The increase from the previous month was 4.7%. However, the margin of error was plus/minus 18.3%. This certainly marginalizes the prospect of a bottom. This number is subject to revision, so the prudent step may to wait until April until proclaiming a bottom.

The graph below is included just for fun.

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