In 2000, there were 829 home sales.  That zoomed up to 1,669 in 2005.  This past year (2011) there were 791 home sales.  Certainly, 1,669 home sales a year is not a normal pace of home sales, but is 791 home sales per year a reasonable assumption for the pace of our local housing market going forward?

To explore this issue, I have created a model showing what home sales would have been if a constant percentage of our local population bought a home each year, and I have included population increases from the past decade.



Above you'll note that in 2000, a total of 0.77% of the population purchased a home (829).  Then, for each following year, I have shown how many people would have bought a home if it continued to be 0.77% of the total population.  Per these calculations, home sales in 2011 (though improved over 2010) are still well below where they (theoretically) should be.  If 0.77% of the population bought in 2011, home sales would have been 23% higher than they were last year.



Above is a second illustration, assuming that 2011 was a normal year -- and that each year we should expect 0.97% of the population to buy a home.  In this scenario, home sales should have been 56% higher last year to have 0.97% of the population buy a home.

Regardless of the actual numbers, my conclusion based on the data above is that 791 home sales per year (as in 2011) is not the new normal for our market.  I believe the market will improve further as to the annual pace of home sales -- at least to 1,000 sales per year.