Losing interest
By Matt Carter, Thursday, April 24, 2008.Bookmarking Sites
Internet searches for "houses for sale" track closely with median home prices published by NAR over the last 12 months, Hitwise's Heather Hopkins blogs today.
Hopkins says she ran a correlation analysis and found "a very strong (.92) correlation between the median house price and the monthly share of US Internet searches. This is about as close to a perfect correlation as I've seen and it got me pretty excited. (Yes, I am a geek.) The correlation is unlikely to be as tight over a longer stretch and I would like to extend the analysis back 24 or 36 months."
Read her entire post here.
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Submitted by Eric Adair on April 24, 2008 - 11:33am.
The declining median price is, most likely, not the cause for the decrease in home searching volume over the time period she analyzed.
I posted a response to her post which basically said that this downward trend usually happens every year and is most likely related to seasonal differences in home search behavior.
-Eric
Business Development
http://www.homesandland.com
Submitted by Mitch Argon on April 24, 2008 - 7:37pm.
Agree with Eric on this one. The chart should, ideally, do year over year comparisons to account for seasonal fluctuations (inventory, sale volume, etc.).
Also, when the media proclaims "BOTTOM!", there will be spikes in home searches as we bounce along the bottom - eventually.
Submitted by Ki Gray on April 25, 2008 - 3:14am.
I agree that there are seasonal fluctuations. But I think we are getting less searches now than this time last year. I dont think it is caused by lower home prices. Basically I think
Crappy Marker -> lower prices
Crappy Marker -> less searches
Site Austin real estate.
Search Austin MLS
Blog Austin Real Estate Blog
Submitted by Jeremiah Wilson on April 25, 2008 - 12:15pm.
Does the median home price in America really fall between a range of 6.5 and 4 million dollars?
Submitted by Matt Carter on April 25, 2008 - 1:07pm.
Good point Jeremiah -- what is up with that Y-axis? If you look at the data from NAR, looks like what she might have actually been looking at was the annual rate of sales, not median home price.
http://www.realtor.org/Research.nsf/files/EHSreport.pdf/$FILE/EHSreport.pdf
You would sort of expect search activity to correlate with sales, wouldn't you?
I've posted your query to Heather.
Submitted by Matt Carter on April 30, 2008 - 5:48pm.
Heather has updated her post -- turns out she was actually looking at the annual rate of sales, and the correlation didn't hold up when she ran the numbers again with median and average home prices. Heather writes:
"I made an error when I originally posted this entry. I copied and pasted the wrong column and so confused rate of sale with price ... I did not find the same strong correlation between housing prices and internet searches. The correlation was .68 between searches for 'homes for sale' and the median housing price and .69 for average housing prices."
Still interesting, but it seems that because most people start their search for a home online, it's inevitable that there would be a correlation between the rate of sales and monthly share of Internet searches.
What I thought was interesting about the proposition originally put forward was that a relationship between falling prices and monthly share of Internet searches might have meant people were losing interest in even shopping for a home as long as prices were falling.
Might still be interesting to see if searches pick up before prices bottom out -- maybe there will be some sort of inverse relationship between home prices and "homes for sale" searches.