Posted by Jonathan J. Miller -Monday, March 19, 2012, 8:41 AM
Jed Kolko, Trulia’s Chief Economist, let me sneak a peak at his excellent post “Springtime for Housing” as he was placing the finishing touches on it last week. Knowing me all too well, he asked me to set aside one of my pet peeves with econo-housing stats – the use of seasonal adjustments – and focus on the long term view.
To understand the effects of long-term trends or one-time events on the market, housing wonks like to “seasonally adjust” data. That means we strip out the regular seasonal patterns in order to highlight trends or events. This is useful for deciding whether the market is really in recovery or assessing the impact of a housing policy.
He came up with some terrific visuals and identifies some interesting points. One of the most powerful to me was the fact that seasonal sales activity fluctuates a lot more than inventory.
Rising sales and build-up of inventory make for a spring housing market cocktail.
- Springtime for Housing [Trulia Trends Blog]
- We’re Better Off Without Seasonally Adjusted Housing Stats [Matrix]