The 'End' in Sight?

We're starting to see some credible data to support a prediction of the market bottom. Once again I look to my revered Case-Shiller Index (remember Robert Shiller got it right in the heady years of the market boom) and have plotted the actual index against what I'm calling 'normal appreciation' (the average increase of home values for the 13 years before the boom began).

The large chart shows the 22 year history of the index measurement in South Florida; the inset focuses on the change so far in 2009. As you can see, the actual value index (the top line) is rapidly moving toward the 'normal' trend line below.

I suspect we'll see these lines cross as actual values will fall below the trend line as an over-correction is likely but I also sense values will fairly rapidly rise to return to the trend after bumping along the bottom for a few months.

OK...there you have it...I'm on the limb with a prediction (sort of). In any event, it's a great time for buyers (with better housing value and low interest rates) and sellers with long term equity can pretty closely predict the value of their property by applying the trend appreciation from their date of purchase (especially if that purchase was before 2001).