Economic Rebalancing

The global economy is horribly out of balance, with the United States going deeper into debt each year as a result of a huge trade gap. This blog describes the process of global economic rebalancing. If you have any comments or questions about the posts here, please don't hesitate to use the comments section.

Saturday, October 28, 2006

A Long, Cold Fall and Winter

For most people trying to sell homes this Fall and Winter, it will be a long, cold 5 months. We've entered the slow season, when many sellers simply choose to take their homes off the market. However, with ARM resets and affordibility issues hitting many, the number of distressed sellers continues to rise.

Looking at Existing Home Sales data from the past two years, the seasonal buying pattern is clear:


When we compare the monthly sales totals with the inventory totals, we can get an estimate of the percentage of homes on the market that actually sold during the month:


In September of 2004, around 24.01% of homes on the market sold.
In February of 2005, around 17.25% sold.
In June of 2005, around 28.12% sold.
In September of 2005, around 22.73% sold.
In February of 2006, only around 13.43% sold.
In June of 2006, only around 18.70% sold.
In September of 2006, only around 14.07% sold.
In February of 2007, perhaps less than 10% of homes on the market will sell.

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