[Click to expand!]
Now that our quarterly gauntlet of reports is behind me, I thought I'd throw a chart together to gain a little perspective on where we are now with context given to the past decade. I plotted median sales price adjusted for inflation against the monthly absorption rate. Absorption in this case is defined as the number of months to sell all active inventory (excluding shadow) at the current pace of sales activity. In grocery store parlance, it would be the number of months to sell everything on the shelves if no one restocked them. I'd love to go back 25 years which is the extent of the bulk of our sales data but was only able to begin to capture listing data circa the dotcom era needed for the absorption stat.
The red line reflects median sales price adjusted for inflation and the blue line represents the month absorption rate. The dotted lines represented the 10-year average for each of the two metrics and provides a benchmark for the decade.
Its interesting how stable both metrics became after Lehman relative to before the tipping point. Prices have remained in a fairly stable pattern with some skew caused by the tax credit. Absorption also showed similar stability in recent years as well.
The patterns are in sharp contrast to the volatility leading up to Lehman. Further proof that the country lost its mind. I wonder when we get it back?
· Matrix [matrix.millersamuel.com]
· Three Cents Worth archive [Curbed]