Dear Skeptics, What Will It Take For You To Believe?

Earlier this week I posted my monthly market report for Harrisonburg and Rockingham County and I pointed out that there were several indicators that suggested we might be seeing an end to the local real estate downturn.  Several of you were quite skeptical -- attributing any short-term positive indicators to the tax credit.  A few clarifications before I get to some statistics:

1. The number of local home sales has declined quite significantly for the past five years.  Prices have declined relatively slowly during that same time period.  From my perspective, a local housing market recovery will take place when we first start to see more home sales than in the past, and after that we'll see stabilizing and then increasing prices.
   
2. I am NOT sure that we really are seeing a definite and lasting change towards the better in our local housing market.  BUT....several key indicators in my market report indicate that we might be.
3. It's really o.k. if you are skeptical --- in fact, it's what keeps me on my toes!
   

The main point of contention that I have heard relative to my report is that though there were a LOT of contracts written in March and April, that this was likely almost entirely because of the April 30th deadline to sign a contract in order to receive the $6,500 or $8,000 tax credit.  So.....if the skeptics are correct, we should see a significant drop in contracts being signed in May, right??

First let's look at signed contracts per month:

• March 2010 = 95 contracts
• April 2010 = 121 contracts
• May 1 - 13, 2010 = 46 contracts
  Extrapolating, that will likely be 106 contracts for the month!

Next, let's compare this May to last May:

• May 1 - 13, 2009 = 29 contracts
• May 1 - 13, 2010 = 46 contracts

Finally, remember that my tentative optimism is not just based on March and April 2010. 



Each data point in the graph above shows the number of sales in a twelve month period.  It often takes months for a trend to appear using this metric, but it seems pretty clear to me that over the past six months (which includes data from the last 18 months) we have seen a significantly different trend than we saw between 2006 and 2009.

What do you think?  Still skeptical?