Palos Verdes home prices and sale volume trends

I observed two significant events in my monthly review of sale trends for Palos Verdes home prices and sale trends. To have both occur in one month adds emphasis and strength to the power that is in the market fueling both of these indicators.

For the first time in 4 years, the resistance line shown in the Palos Verdes home prices chart below, has been penetrated. Careful study will have to continue however you can clearly see that momentum has been building for some time.

As most technical stock market traders will tell you, in fact the founder of the Investors Business Daily newspaper constantly pounds in this concept, studying price movement alone is a waste of time without taking into account the volume of sales. Therefore it is highly significant in studying Palos Verdes home prices that we see that contemporaneously with the rise in prices, there is a rise in sale volume. In fact Palos Verdes home sales are at their highest volume in 3 years.

Can you see in the chart below, the fallacy in believing prices will continue to rise when sale volume is weak? Look at the movement of Palos Verdes home prices between 2002 and 2007. It was up wasn’t it? In fact, it was up strongly. Yet what was sale volume doing at that same time? It was going down. And what happened to Palos Verdes home prices after that? Hmmmm.

Yet the opposite is now occurring. Sure Palos Verdes home prices are going up, but more importantly, so is sale volume. We’ve seen similar historical patterns folks. Look at the sale volume of Palos Verdes homes between 1994 and 2002. Palos Verdes home prices were going up then too. It is that sale volume energy that fueled the increased velocity of Palos Verdes home prices appreciation going through 2007. Look, I’m not saying that I have a crystal ball. All I am saying is that history can teach us a lot if we just pay attention. It’s my firm belief that we are at the beginnings of another appreciation cycle for Palos Verdes home prices. Will there pauses, plateaus and down drafts along the way? Sure … nothing goes straight up. But I believe we will see higher highs and higher lows for Palos Verdes home prices in the coming years. By the way, this same pattern is echoed throughout the South Bay and Beach cities.

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Palos Verdes Home Prices

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+George Fotion George Fotion on Google+ George Fotion, HomeIsPalosVerdes.com Original content for this article is at http://www.homeispalosverdes.com/palos-verdes-home-prices-and-sale-volume-trends/