The first point is that any year-over-year comparisons at this point are bound to look good. The numbers from 2009 were lower than those from 2008 until June last year. If real estate values are seen in a long-term perspective, we should be making comparisons over a three-year or five-year timeline.
My second point is that month-over-month performance in our housing market tends to follow seasonal patterns, but they do vary from year to year. In addition, prices in local areas and in category niches can and do vary from the norms, in every kind of market. Even in boom years, there have been local areas where prices hit peak levels in January or February, dropping for the next year or longer.
My “dotted-line” projection for 2010 is simply an indication of the typical shape of these 12-month lines, averaged out over the last 15 years. While February and March have been exceptionally perky, I would expect to see at least some of the remaining months of 2010 dropping below the dotted line. One thing that’s close to a rule: every year for the past 15, there’s always been a mid-year drop in prices, during July and August. The take-away for buyers? Don’t panic. The implication for sellers? Don’t get greedy.