by Calculated Threat on 9/27/2023 04:13:00 PM
Two key factors:
1) There’s a clear seasonal sample for home costs.
2) The surge in distressed gross sales throughout the housing bust distorted the seasonal sample. This was as a result of distressed gross sales (at cheaper price factors) occurred at a gradual fee all 12 months, whereas common gross sales adopted the traditional seasonal sample. This made for bigger swings within the seasonal issue throughout the housing bust.
This graph reveals the month-to-month change within the NSA Case-Shiller Nationwide index since 1987 (by means of July 2023). The seasonal sample was smaller again within the ’90s and early ’00s and elevated as soon as the bubble burst.
The seasonal swings declined following the bust, nevertheless the more moderen worth surge modified the month-over-month sample.
The second graph reveals the seasonal elements for the Case-Shiller Nationwide index since 1987. The elements began to vary close to the height of the bubble, and actually elevated throughout the bust since regular gross sales adopted the common seasonal sample – and distressed gross sales occurred all 12 months.
The swings within the seasonal elements have been lowering following the bust however have elevated once more not too long ago – this time and not using a surge in distressed gross sales.
This raises an fascinating query: Why are costs weaker within the low season than typical?