Asheville Mountain Real Estate Blog

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Location: Mars Hill, NC, United States

A small, highly personalized real estate firm specializing in mountain homes and land in greater Asheville.

Thursday, July 02, 2009

What They Mean By Faint Praise?

Here is a little quote, it seemed funny at the time, on home prices from yesterday's Charlotte Observer, (emphasis added):
All 20 urban markets measured by the index remain in negative territory, but April was the third consecutive month that the index's overall decline didn't set a record.
This notion has popped up often in recent media, ranging from commentary on auto sales to real estate, something to the effect of "such and such is down, but not by as much". To our minds, this is an idea where one makes a mental note, but it is not a basis for proclaiming a bottom to anything.

The article never says, but the index mentioned has to be The Case-Schiller. More on CSI here.

The article ends by making an important point, one that we have made ourselves many times in the past. Seasonality is what we want to know. If it's normal for sales to rise anyway, then by all means say so.
Spring and early summer are typically the best months for sales, he said, “so it will take some time to determine if a recovery is really here.”
Wise words for the time being that put it all into context. As any decent futures trader would do, we look for confirmation before going long or short in the market.

Summary
Of course, no decent trader takes a position without first examining supply and demand.

For us, the biggest concern despite lower prices, is the huge inventory levels. These need to be looked at along with sources of new inventory such as; homes and land waiting to be listed, rising foreclosure rates, stalled subdivisions waiting to to restart, and other sources.

To illustrate the impact, this last item alone means as many as 20,000 or 30,000 homes waiting to be built in greater Asheville.

These will all combine to slow any decline in inventory and keep downward pressure on prices. This is essentially what keeps us in the bear's camp for a while yet.

Thanks for stopping by,
Black Bear Realty Website
828 689 2055
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Filed Under: Real Estate Statistics and Data

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