by calculated risk March 26, 2024 01:00:00 PM
Two important points:
1) There is a clear seasonal pattern in housing prices.
2) The surge in distressed sales during the housing bust distorted seasonal patterns. This is because normal sales followed a normal seasonal pattern, whereas distressed sales (at lower price points) occurred at a constant rate throughout the year. This led to greater fluctuations in seasonal factors during the housing crash.
Click on the graph to see a larger image.
This chart shows the monthly change in the NSA Case-Shiller National Index since 1987 (through January 2024). The seasonal pattern was small during his 90s and early 2000s, but increased when the bubble burst.
Seasonal fluctuations decreased after the bankruptcy, but the month-on-month pattern changed due to the pandemic-induced price hike.
Seasonal fluctuations had been on the decline since the bankruptcy, but have recently increased again. There was no surge in distressed sales this time.
Using seasonal factors for 2018 and 2019, the seasonally adjusted Case-Shiller index would have declined slightly in January instead of rising 0.4% month over month.