Existing Home Sales Plunge 7.2% – NOT!

There are a bunch of headlines around today that broadcast a 7.2% plunge in January home sales for the nation. I’m not even going to bother to try to figure out how they came up with this number – is it from December to January? Is it seasonally adjusted? – because it sends the wrong message. The same articles go on to point out that January sales are 11.5% higher than last January. So…how is that a 7.2% plunge? It’s the year over year numbers that matter.

And in the Chicago area sales are up a whopping 29.2% over last year. In order to allow year over year comparisons of January data I have graphed 13 month histories below.

Chicago Area Home Sales

As you can see we are close to the January 2008 level now, though we are still below 2007 levels. No doubt this is extremely positive, though we have to wait until the tax credit expires to know what’s really going on. In the meantime, I think it’s a safe bet that activity will remain strong through April. Business has really picked up in the last few months and mortgage rates are still near 50 year lows.

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