Could New Escrows Be a Leading Indicator of Home Sales Trends?
In my last two articles, I took a look at the appreciation of single family homes since 2000 as well as the shifts in the dynamics of the market. The value of homes has outpaced inflation during this time, but the number of sales are down by a significant amount. The peak average sales price of homes sold in most areas occurred in 2007. Since then, there has not only been a drop in sales, but also a steady decline in average sales prices. I began to wonder if there were any reliable indicators that might foretell the direction of both the numbers of homes sold and their average sales prices. Has the market turned around yet? I am asked this question often so it would be nice to identify a way to determine this. A reliable leading indicator might do the job. In pulling together sales data to answer this, I noticed an interesting pattern. In most years, between 11 to 15 percent of the sales of homes in the South Bay take place in November or December. This is not far off the straight-lin
