Skip to content

Seattle Bubble

local real estate news, statistics, and commentary without the sales spin.

Menu
  • Home
  • About
  • Contact
  • Reference
  • Speaking
Menu

Bottom-Calling Checkup: No Bottom In Sight Yet

Posted on July 31, 2009July 30, 2009 by The Tim

Back in February while the market’s deep freeze was leading some observers to anxiously declare that we had reached the bottom, here at Seattle Bubble we sliced and diced the market in Bottom-Calling Week. In the series we explored six different analytical methods for predicting when real estate around Seattle would hit “the bottom.”

Six new months of Case-Shiller data have been released since that series and two potential bottom dates are now in the rear-view mirror. It seems like good time for a little checkup.

First up, Method 0: Blind Optimism. Our “Blind Optimism” forecast method was based on a mere gut feeling that January was the peak for year-over-year drops. This method predicted a bottom in February at 16.9% off the peak. Let’s see how that turned out:

Bottom-Calling Method 0: Blind Optimism

I guess we can put that one to bed. February was definitely not the bottom.

Next, let’s check in on Bottom-Calling: Inventory-Based Forecast, which was based on the relationship between standing inventory (“active listings”) and home prices that Deejayoh explored in his post Why Inventory Matters, and predicted a bottom in April at 20.1% off the peak.

Bottom-Calling Method 1: Inventory-Based Forecast

Looks like April wasn’t the bottom either. Although, in fairness, in the time since we made this forecast, we discovered that the NWMLS changed the definition of “active listing” back in July 2008 a way that resulted in lower inventory being reported at the end of the month. So it’s no real surprise that this method turned out not to be very reliable.

Lastly, let’s check in on a summary of where we’re at so far with respect to all six of our bottom-calling methods:

Bottom-Calling: May 2009 Update

Our official February 2009 call was for 36% off the peak in December 2010. Six months later, I’m still comfortable sticking with that guess.

Share:

  • Twitter
  • LinkedIn
  • Facebook
  • Reddit
  • Pinterest
  • Email

Continue Reading

Next Post:
Are Home Price Drops Around Seattle Mostly Over?
Previous Post:
July Housing Market Stats Preview

Tim’s Other Projects

Dispatches from the Multiverse

Tip Jar

Like what we're doing?

Drop us a tip!

Accounts

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org
©2025 Seattle Bubble | Built using WordPress and Responsive Blogily theme by Superb