That is a good point about the lag, though I think that’s not all of it. The divergence has after all been happening all year. I think the other part of it is that the cheep stuff is what is selling, whereas the more expensive stuff only makes it into the asking price series.
As for inventory, it’s a valid point and has been discussed much on the board (look for stuff written by the resident realtors). There is a lot of speculation that the low inventory could lead to a price rise, which seems like a reasonable possibility. However, it’s tough to think of it as the bottom when there are so many foreclosed properties that haven’t hit the inventory yet. So it’s certainly bullish short term, but the backlog of inventory that hasn’t hit yet prevents me from becoming long-term bullish.
