Posted by Lem Purcell, Director of IT & E-Business, Bosshardt Realty, 03/20/2009
Well, today is the first day of spring. A rebirth. A new beginning. Call it what you may, poetically or not.
Spring means a few things here in Gainesville. First, the weather turns a bit warmer after a few brutal winter nights in the 40s and [gasp] 30s. Second, the Parade of Homes is just around the corner. Third, the Gator roundballers are in the Big Dance and aiming for another championship.
Okay, 2.5 out of three ain't bad. At least the Lady Gators are in. . . .
This year, however, spring adds a fourth dimension. Here at Bosshardt, we track a little stat we call "12-month over 12-month market volume." It's a simple analysis (with a fancy name) of a month's total sales volume plus the previous 11 months of sales volume. Then, we compare the current figure to the same 12-month sales volume from a year ago. Why 12-months? In a mid-size market like ours, simply comparing one month of data to another can be misleading. A 12-month analysis irons out any anomalies and outliers resulting from, say, a big commercial sale or investor run on condos. As a result, we get a more accurate picture of macro-level trends and market health than we would with a short-sighted look at 30 or 60 days of data.
To the point: With February's numbers, we found, for the first time in 24 months, a reliable sign that the bottom has passed and we are now on the road to recovery. For two years, there's been a steady and predictable decline in the 12-month over 12-month comparisons, ranging from -15% in 2007, to -20% in early 2008, and finally to December 2008's all-time low of almost -40%. In January, however, we saw a modest uptick - a 12-month over 12-month drop of "only" -38%. It was not big news at the time, as we'd seen a couple of other improvements over the past months that proved to be only a blip. In February, however, the trend continued with an improvement to -37%. A modest swing, to be sure, but nonetheless, a subtle indicator that the bottom has passed, and perhaps predictor that the recovery of the housing market (and, correspondingly, the economy as a whole) is beginning. Here's the graph of 12-month over 12-month comparisons (click to enlarge):
The red line represents the actual data, and the dashed line is an Excel-generated trend line predicting the general direction of market health over the next two months.
What does this mean? Well, if you've been hesitant to pull the trigger on that home purchase, I can say, objectively, that now just might be the time to fire away.

