Based on “normal” seasonality, things are going to be looking a lot worse at least until next March 2009. The charts shown below show monthly sales, “stacked” by month, most going back to 1999, (each line across the graph represents a different year), so you can see the normal ebb and flow of dollar sales in each of the three markets we cover over a 10 year period.
It is easy to see that sales are at the highest in May, June and July, and generally lower in the fall and early winter months. This normal seasonal pattern is caused by people making decisions to move during the summer months for school reasons. This is not likely to change much.
The charts to the right show the monthly sales from 1999 (from 2002 for Baldwin County) to present “stacked ” by month (click to enlarge). Note also that we use a beginning of month convention so August is July data!
The three markets shown here show that seasonality is not specific to one of them.
The next 7 to 8 months, until the spring buying season kicks back in, as it will, will be very challenging.
The message is: If you are managing REO, negotiating with borrowers or lenders, be aware that seasonality is working against sellers at least until March of 2009.
This seasonal decline in sales does not consider the possibility, some might say inevitability of, increased supply of houses coming to market from sellers, many of whom have been holding off marketing their houses until conditions improve and banks managing REO bringing their backlog of houses to market.
If you are a consumer, be aware that it is going to be a tough market and have a professional Realtor advise you on the best marketing strategy. Have a good plan.
Of course conditions vary widely depending on area price range and the new vs. existing house market, our full reports break all this information out for you in a way no one else does.