August 31, 2012
The housing market is “on the upswing,” if the media is a valid measure. In fact, you could call it a house party. Most pundits are bullish because the Case Shiller 20-city Index is up 3.6% over the past six months. CNBC advised on Tuesday, “The best way to invest in real estate now that housing has bottomed out is in local builders… .” But is it really the bottom? Even Robert Schiller himself is unsure. His index remains below its July 2009 low and is flat for the past year. Noticing a number of recent stories calling a housing bottom, I plotted monthly Google News occurrences of the exact words, “housing bottom,” since 2007 against the Case Shiller index. As you can see, talk of a housing bottom bumped up at the May 2009 low in prices, but the July-August chatter has literally shot through the roof. Does a lot of positive news mean the bottom is in, or is it just another false alarm? (Click here to read more.) We prefer to keep an eye on the primary indicator of society’s asset affinity: the long-term trend of social mood reflected in the stock market.
If you look closely, you can see patterns in social mood that help you predict social trends. Learn more with the Socionomics Premier Membership.