Home price upswing: Seasonal or not?

By Geert De Lombaerde Posted on September 29, 2009 at 2:25 pm

Well, that depends on who’s dissecting the new Case-Shiller numbers: Hedge fund manager Tom Brown says the housing bears need a new excuse.

…[S]equential monthly improvement in the index usually deteriorates seasonally in July. This month, though, the change in the rate of change rose by 18 bps. So instead of a seasonally monthly slowing, we’re seeing month-on-month acceleration.

CNBC’s Diana Olick says the numbers are a lot closer to reality when they’re seasonally adjusted.

whether we’re in a housing boom or bust, home prices always rise in the spring/summer months, due to the type of buyer largely in the market. Families, i.e. move-up home buyers, looking to close and move over the summer so as not to disrupt school, dominate the market in the spring and summer.

They are, for the most part, buying larger, more expensive homes, and they therefore skew the median home price in their market higher. In the fall and winter, you tend to see more first-time buyers as well as more single buyers who want smaller, lower-priced homes.

Stephen Stanley of RBS says focusing on seasonality doesn’t matter too much; the improvements are simply a case of the market coming off the absolute bottom of early this year.

…[I]n retrospect, a rebound of some magnitude was likely as demand recovered from non-existent to merely weak.

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Tags: Bankstocks.com, CNBC, Diana Olick, economic indicators, home prices, housing market, RBS Securities Inc., residential real estate, Standard & Poor's Case-Shiller Index, Stephen Stanley, Tom Brown