February 3, 2004 Weekly Bay Area Real Estate Market Newsletter

There are indications that the market is continuing to slow. Based on data back to September 1998,
    1) Inventory is growing when compared to any year other than 2001, since the New Year;
    2) Sales are currently dropping when compared to any year;
    3) Only 2001 had significantly few sales;
    4) Days of unsold inventory is increasing compared to any other year.

It is clear that the current slow-down is significant. The questions are why are the buyers disappearing and how long will the slow-down continue? The data is still being impacted some by the holidays. It is possible that these changes can be explained by more agents holding listings on the market and/or holding them on for a longer period of time. We don't believe this is the case. We believe that the slow-down is real.

HOWEVER, the slow-down needs to be kept in proper perspective. Despite a market that has been slowing since mid-November, this is still the second strongest year.

The table below compares the current real estate market conditions to each of the past 6 years. The sign ( + = - ) next each year indicates if the current market conditions are currently improving(+), staying the same(=), or getting worse(-) compared to that specific year. You can compare both value and direction of change. You can view the graphs of each market indicator by clicking on the column headings in the table below. Currently the market is so strong, that the market will have to weaken significantly before there is any softening of prices. Notice the number of negative signs in the table below. The only positive signs are associated with 2001, which was a pretty bad year and therefore not saying much. This indicates that the current market conditions are getting worse when compared to these previous years. Even though the 2005 real estate market is clearly showing signs of slowing, the conditions are still stronger than most previous years, except for the volume of transactions which is actually weaker then many previous years. Therefore, price increases early in 2005 are very likely. Comparing the current market conditions to 2000 alone or any other single year would give significantly different results. Remember that 2000 had the unbelievable appreciation of 33% in the first 4 months of 2000. It might actually be good that the real estate market is not that strong. Using DUI as the primary indicator of the real estate market's health, there is no question the market is currently better than any year except 2000. But at the same time it is equally clear that the market is weakening more rapidly than most other years with 1999 and 2001 being the exceptions.

Using a 5-year average (graph) as a norm, allows us to better understand the behavior of the real estate market while viewing just one graph. Notice that the gradual decline in inventory leveled off in December and then reversed and has been increasing since the New Year. There have been three significant drops in initiated sales volume:
    1) the month of June 2004;
    2) mid-November through mid-December 2004; and
    3) starting on 1/12/2005 to present.
The recent fluctuations in DUI compared to the 5-year average appears to have been replaced by an increasing DUI ratio on January 3rd. It is this increasing DUI ratio that is our biggest concern. Because of the strong influence of the holiday, DUI will not be an accurate benchmark of the market conditions until after January 18th. DUI is actually decreasing (because of the holiday effect) but decreasing at a slower rate than normal. That is why the DUI ratio is increasing. The question has become, how long and how rapidly will DUI ratio increase? Remember, when comparing current data to the 5-year average to get ratios is seasonally adjusting the data. Our current expectations are that DUI will decrease (at a slower than normal rate) from the current level of 35.6 but will not reach the pre-holiday levels of 25 before increasing again. This is based on our belief that the increase of inventory and decrease in sales are real. Remember a DUI of 45 to 90 is what we consider a balanced market. So even if our projection is correct, and the current DUI of 35.6 is heading to about 30 before increasing. Consequently, it will take a while for prices to drop because price decreases should not happen until DUI is at least approaching 90. 

Viewing the sales volume raw data is eye opening. Notice that current volume of initiated sales did drop below the 10-year average. This means SCC is currently experiencing fewer transactions (initiated sales) than the 10-year average despite expanding number of homes in SCC. The deep blue line shows the significant drops in number of transactions as shown in the second column in the table below. It is the vertical separation between the two lines that shows the "extra" transaction in 2004 when compared to the 10-year average. If you visualize this as a percentage you get the third column in the table below. Most people think that the slow down was just the annual holiday slow-down. Noticing the rapidly decreasing vertical separation between the two lines. It is clear that this more than a normal slow-down. Based on our data, 2004 experienced the greatest percentage reduction in sales volume based on a percentage of the summer's peak volume. The end of 2004 experienced sales of only 44% of that summer's peak. Other years were 2003=55%, 2002=54%, 2001=95% (fueled by the post 9/11 feeding frenzy), 2000=47%, 1999=48%, 1998=62%, 1997=63%,1996=47%, 1995=61%, 1994=48%. Clearly something to monitor. 

There is no question that there has been a drop in sales volume when looking at the 10-year average. Some people are confused why when sales have increased from 968 to 1,046 we consider this a decrease. This because normally sales increase very rapidly at this time of the year. This can be seen in drop in the 10-year average. Comparing to just 1999 is interesting as it shows the difference in timing. But there is still a drop from 127.2% to 80.8% of the 1999 volume. Remember that most of 1999 and 2000 saw volume at about 135% of the 10-year average. The fact that SCC dropped from 153% down to 136% was not alarming at all. The drop from 133% to 116% was a bigger concern especially because we still have no good explanation other than the election. The third drop with respect to the 10-year norm started on January 12th has seen volume drop to 98.0% with no indication that this third decline is ready to stop.     

With the New Year the 2004 to 1999 comparison changes to the 2005 to 2000 comparison. When looking at the comparison to the 2000 graphic, which seemed logical as the real estate market conditions were similar and the identical calendar, it is apparent that something is different. Sales are dropping and then increasing, but on a gradual decline trend. Notice the sharp drop in sales starting January 12th. More noticeable is the increasing inventory relative to 2000. The increasing inventory combined with the decreasing sales is causing the most important indicator Days of Unsold Inventory to climb rapidly. If the DUI continues to climb, the market will eventually slow. The departure that started November 12, 2004 is even more striking when noticing how constant the comparison had been for early 2004. 

Because people remember last year the best here is a comparison between 2005 to 2004. Sales were at about the same level until January 12th and then sales started to drop off significantly compared with 2004. Inventory is growing and now 69% of the 2004 level. With the decrease in sales and the increase in inventory, the market 2005 is currently hotter than the 2004 market but cooling and approaching the 2004 intensity. 

Although not very satisfying, the best explanation we've heard remains that consumers were racing to beat the election out of fear something would change. When nothing changed after the election there was no longer a need to race, so the demand dropped to normal. However, this explanation does not shed any light on the third deterioration that started on January 12th nor the first drop in initiated sales during June 2004. 

We have pulled our 20% price increase for 2005 off the table and replaced it with "we don't know." But we are starting to gain some confidence. If asked to provide guidance, we would suggest a normal year for 2005. This would suggest gradual appreciation of about 10% by the end of April 2005. We would then expect this to be followed by a plateau followed by small reductions in price as the year progresses but ending the year higher at approximately $700K. Another possibility is that prices will peak by Valentines Day likely ending 2005 at about $675,000. A third possibility is that the rapid decline in volume is just getting to normal level for the holidays and the extra volume will return after the New Year resulting with 2005 experiencing 15+% appreciation. We currently believe that the first alternative is the most likely. Currently, we are not expecting any significant change in the median Sold price for single-family homes in SCC for January or February. This is a little unnerving in that 2001 saw prices flat in January, February and March before declining 10% by September. The slow-down on November 12, 2004 was 45 days before the slow-down at the end of 2000. So it is possible that a we are witnessing a 4th possibility and that is the market is peaking now and will be flat or decline starting in March 2005. We are still dismissing this alternative because the DUI in 2001 at this time was 64.8 opposed to 35.5. This would strongly suggest that the current market will see more appreciation and that is why we still believe the first alternative is the most likely. 

Remember, real estate is a great long-term investment. With the current behavior in the SCC real estate market statistics, we would recommend rational normal behavior, making plans for long-term and not the short term gains. Consider accelerating your planned purchases while watching the market carefully if you need to sell. Next week's analysis should be more definitive as we get further away from the holidays.

This weekly analysis is based on the overall real estate market conditions of single family homes in Santa Clara County. If you are considering selling or buying, it is important to evaluate specific real estate market data for your individual transaction based on price range, geographic area, and type of real estate you are purchasing or selling. Just contact us for this customized information. 

Conclusion - We consider the market fundamentals to be; supply (inventory), demand (initiated sales) and supply/demand ratio (DUI). Until mid-November 2004, these market fundamentals had been very similar to their 1999 levels. Inventory is now at 173% of the 2000 level. Many agents are still claiming that there is no inventory despite it being 73% above the 2000 levels. Sales are at 105% of the 2000 level. Remember, although 2004 turned into a record volume year it did not start out that way. The most important factor, DUI is at 165% of the 2000 level. (graphic) This indicates that the 2005 market is cooler than the 2000 market with significantly more inventory, slightly more sales and a significantly higher DUI. These three market fundamentals began duplicating a previous year's pattern in the Fall 2003 by duplicating the Fall of 1998. As 2004 arrived, market conditions continued repeating the past by duplicating the 1999 market conditions. Then starting November 12, 2004 there was a sharp departure from this established  pattern. We think that this means SCC will see less than the 33% appreciation that 2000 experience but more than the 15.7% that 2004 experienced. Although still stronger than 2004 the market conditions are worsening rapidly compared with 2004. If the worsening trend continues then the expected appreciation would be less than 15.7%, even counting the appreciation that was pulled forward into the late Fall 2004. We will continue to monitor this activity closely.

There is little doubt the real estate market is slowing, even if most others don't recognize the slow-down. The market conditions are still so strong it will take longer for this slowing to get the market into a balanced market. Will the slowing continue long enough to reach a buyer's market? In 1999, the median Sold price increased from $353,350 in February to $398,000 in April 1999 or 12.6%. The 2004 economy was weaker than 1999 which should have translated into a cooler real estate market. Because of the stronger Buyer demand, 2004 appreciation reached 15.7%, as the median Sold price reached $647,000 on July 9th, before dipping to $625,000 on September 3rd before increasing and reaching $660,000 on December 16, 2004 and has been relatively flat since but did increase to $679,500 this week setting yet another new record high before dropping to $667,375 this week. We would expect these slightly increasing prices to continue into early 2005. However, the price increases will likely not be as steep and likely will not last as long into 2005. Valentine's Day will be a critical time as we believe that the trend will change to either up significantly or a slight retreat losing some of the gain established late in 2004 and early 2005. We are still recommending a purchase ASAP, as we are expecting additional price appreciation early in 2005. The real question is how much and how long into 2005 will this appreciation continue.

The median Sold price in 2000 increased from $420,000 to $560,000 or 33.3%. This would indicate a median Sold price of $848K IF the market continued to duplicate the past. We do NOT expect that level, especially after the November 12, 2004 change. It will be interesting to see how the market fundamentals behave in early 2005 compared with early 2000. We believe that this will determine the actual prices for 2005. If the market appreciates the same as it did in 1999 and 2004 then the median Sold price would be about $728K. Because of the November 12th change, we currently believe that this is too optimistic. Regardless of which one of these scenarios you believe, they both should result in the median Sold price for SCC being above the current $661,000, at least initially.

The market continues to show signs of weakening but 2005 is still currently the second strongest year since 1999. Sellers should wait until past the current holidays but should be ready to go on the market. Sellers should watch the market for signs of strength or weakness and act accordingly. We think there is a good chance that waiting until about April 15th would be good. HOWEVER, if the market continues to weaken this target day will move forward by as much as 60-days. This did happen very early in 2001 and might happen again. Buyers should move forward ASAP while being careful not to overpay too much or settle too much as the price increase in early 2005 is currently expected to be substantial but not huge. This means buyers need to exercise some caution in the bidding frenzies that are so common. Buyers need to be willing to compete, but not go crazy. 

Inventory – 1063; inventory is higher than 2000 (173%), but lower than 1999, 2001-2002, 2004 (64-71%) and significantly lower than 2003 at only 37%. The general perception during 2004 that there was no inventory appears to be based on 2002 & 2003, opposed to a more historical point of view. Despite the widespread perception of an inventory shortage, when compared to the past 6-years inventory had been normal for much of 2004. Higher than normal volume of sales tends to make normal inventory seem inadequate. 2004 inventory has been supplied in part by sellers unable to sell during 2001-03. The gradual elimination of this surplus inventory is likely going to cause a shortage of inventory in 2005 and was contributing to our belief that 2005 would likely be similar to or stronger than 1999. Since November 12th, inventory has been growing significantly when compared to 1999/2000. This indicates that there are more sellers ready to sell. The general perception of limited inventory is aiding the current price firming even as inventory is really growing and potentially getting ready to normalize the real estate market.

Days of Unsold Inventory – 35.6; The balance between supply and demand is the most important factor in a free economy. We measure this balance using Days of Unsold the Inventory (DUI). Most areas in the nation use "months of unsold inventory." It appears that DUI stabilized around February 20, 2004. DUI dipped to a low of 30.4 on April 9th, because of Easter. DUI had been climbing since with dips that were related to the Memorial Day holiday and then a second dip related to July 4th versus an acceleration of the market. With the passage of July 4th, DUI had been basically flat. Subsequent to Labor Day, DUI was relatively flat because the market was actually slowing gradually offsetting the normal decline in DUI. With the arrival of October, DUI finally started its annual Fall decline. There has been an unexpected hiccup in DUI as a result of the November 12th change that was initially masked by Thanksgiving. We will be watching DUI closely but until after January 18th, DUI is impacted too much by the annual holidays to be of much use. It appears that DUI has turned the post-holiday corner and is starting to drop. However, it seems unlikely DUI will reach the pre-holiday level of 25. We are guessing that it will only make it back to about 35 days of unsold inventory before reversing and increasing.

Many areas such as South County (it is unusual to see this area on the fast moving list), Santa Teresa, East Valley, North Valley, Milpitas, Santa Clara, Blossom Valley, Almaden Valley, Cambrian, Campbell, Cupertino, Sunnyvale, and Mt. View are leading the way in Santa Clara County with 13 to 33 DUI. This puts much of Santa Clara County squarely in a Seller's market despite the generally weak economic conditions. Other areas such as Saratoga, Los Gatos and Los Altos are lagging behind with 84 to 139 DUI. Eliminating slower areas, DUI drops to 26.

It is also important to note that the different price ranges have significantly different DUI and therefore different market conditions. These price ranges should be considered the low, middle and high price ranges in any given real estate market area opposed to the set price ranges. So, in the more expensive areas the prices that represent low, middle and high are higher. The low priced homes (those under $600,000) only have 17 DUI. Homes between $600,000 and $1,000,000 have only 28 DUI (1-month). Clearly, both of these markets are hot. Even the high-end had started to improve and entered a balanced market before slowing again. Currently, homes between $1.0 Million and $2.5 M have 72 DUI (that's only 2.5 months); homes between $2.5M and 5.0 M have just over 9 months of unsold inventory and homes over $5 Million have just over 3-years. 

Median List Price - $650,000. Basically unchanged. There is no question that the median List price jumped up enough to end the fifth dip by passing through $629,000. Median List price reached $616,000 back on April 16, 2004. Subsequently the median List price dipped five times. On December 23, 2004, the median List price increased to $663,500. It is surprising, but not unheard of, to set a new record high for List price in December. There is currently no indication that prices are dropping. It seems that the consumers anticipated the price increase that we were expecting to happen early in 2005. This caused the prices to increase during the end of 2004. This is what also happened in the Fall of 1999 and Fall of 2000. With the current shift in the market that started November 12, 2004, we are now questioning the amount and duration of the 2005 increase. SCC could see a year like 2000 where the price increased and then fell back some with even an earlier peak like in 2001. The change in the market conditions occurred 45-days earlier on November 12th instead of December 31, 2000. Remember we have often said that it takes people 90-days to realize the market has shifted, so the Valentine's Day period could be very interesting.

Pricing tends to be a lagging indicator as it takes time for sellers to adjust. List price had been basically flat since mid-May 2003 through mid-January 2004. Prices then climbed through mid-March. Then List price was flat until taking a step increase around May 21st, before being level again. There has been a gradual increase in List price, from October 22, 2004 until December 23, 2004. List price is used for recent sales because Sold price is not available until each escrow closes. Using List price eliminates the delay caused by the 30-60 day escrows. 

Number of initiated Sales per day – 29.9. The all time record high level of 66.7 was reached just prior to Memorial Day 2004 and will likely remain the record for years to come. This means that SCC is selling just under one-half the homes of just 8 months ago. The previous record was 54.8 sales per day also reached just prior to Memorial Day but back in 1999. It will likely take years of growth before SCC beats the record of sales (2,337) set on May 29, 2004. Sales dropped to 1,885 on July 23, 2004. This means that 20% of the sales volume disappeared in under 2 months. This initial radical drop in sales leveled off. Initiated sales have been basically flat at 1,854 until September 6, 2004. As Labor Day sales entered the data sales volume dropped to 1,681. On October 6, 2004, as the Labor Day sales are leaving the data, initiated sales increased to 1,768.

There was a second radical drop in sales starting November 12, 2004 when sales dropped from 49.3 sales/day to only 38.3 sales/day. This represents a second 20% drop in 3-weeks but during a period when sales started to drop significantly because of the annual holidays. Sales volume continues to drop from their reduced levels as we would expect because of the holidays. The 2004 slow-down appears to be the most significant reduction in sales volume even when expressed in terms of a percentage of the peak. Clearly, this reduction is more than the seasonal slow-down.

Percentage of normal sales initiated – 98.0%. The all time record of 154% was also set just prior to Memorial Day 2004. This is a seasonally adjusted data point and therefore very difficult to predict. Sales had been dropping faster than the past 6-years. This explains the drop from 154% to 132%. In August and early September sales were dropping at the normal rate causing the percentage to level off at about 132%. Then there was a small drop before leveling off again since September 24, 2004. Between November 10th and December 16th, there was a second drop from 132.7% to 114.3%. The big unanswered question is why the reduction in sales volume? Remember this is not adjusted for any growth over the past ten years. Therefore, 98.0% is below normal. Because the local real estate appears to respond to demand more than supply, this is an indication that the real estate market is softening. The weakening of sales combined with the increased inventory and more importantly the recent increase in DUI means that we are a lot less confident in our expectation of significant permanent appreciation in terms of median closed price in 2005

Median Sold price – $667,375. Down $12,000 from setting a new record high of $679,500 last week. But up from the $660,000 set on December 16, 2004.

With the arrival of Valentines Day 2004, SCC experienced significant upward pressure on prices. With the passage of Easter we expected leveling off in prices and this basically occurred. With the passage of both Memorial Day and July 4th we expected that prices would drop and that has happened. As expected the dip was reflected in the July's median Sold price and caused August's median Sold price to drop more significantly to $625,000 before increasing to $630,000 for September, $636,000 for October, $649,000 for November and $661,000 for December's median Sold price. We believe that this is pulling some of 2005's appreciation forward into late 2004. The same thing happened in late 1999 and 2000. June 2004's price level represents a 15.7% increase since January 2004. Remember that escrows take about 40 days to close. Mother's Day was the true market peak for 2004, at least until recently. 

An interesting factoid, November has been a year-to-date record only 3 times since 1984. These were 1988, 1999, and 2000. In all three cases this was followed by some significant price declines. June 1989 ($235,000) to Oct 1990 ($216,000); April 2000 ($560,000) to September 2000 ($505,000) and January 2001 ($577,500) to October 2001 ($481,000). Only time will tell. Because we don't know what is causing these reductions in volume it is possible that volume will increase significantly after the holidays. Again any ideas you may have explaining the sudden drop in volume of sales would be appreciated.

Average Sold price to List price ratio – 101.8% This means on average Sellers are getting more than they are asking at the time the offer is accepted. This had been relatively flat since August 20. 2004 but has started to show some increase in the last 3 weeks and remains above the previous peak of 99.3% experienced on 9/12/03. But below the current record of 102.0% set on May 7, 2004. SCC hasn't experienced these levels since back in 2000. We consider 98.5% a normal real estate market. This is based on the asking price at the time the offer is accepted not the original asking price and reflects market conditions 25 to 95 days ago because of the length of escrow and how this data is collected. This is one of the few times where an average is more useful than the median. The median ratio would almost always be 100%. 

Percentage of completed Sales where Sold price is greater than List price – 55.5% Overbidding had been increasing more or less since June 6, 2003. Overbidding has been relatively flat from August 13, 2004 though September 10th and then decreased thru October 8th and has been climbing from October 18th to November 19, 2004 and essentially flat since. These reversals are significant as they indicate if more or fewer buyers are willing to over bid. This is an indication of the demand side pressure. Currently about 3 out of every 5 sellers are getting more than their asking price, at the time the offers accepted. It could be less than the seller's initial asking price, but is more than the price at the time the offer is accepted. It is like we are in 1999 all over again despite a weaker economic conditions, and now combined with weaker Buyer demand. 

Median DOM for completed sales – 14 days. Not currently very interesting because the MLS is allowing DOM to revert to zero.

How are the other Counties doing? SZC is on fire and MTY remains strong. Based on the moving monthly data published weekly, SMC median List price is now $775,000 off $24,000 from their December 2, 2004 record high of $798,888. SMC median Sold price is $782,000 down $28,000 from the record high of $810,000 set December 23, 2004. The SCC median List price dropped to $650,000 basically $13,500 below their record high of $663,500 also set December 23, 2004. The median Sold price at $667,375 is off $12,000 from the new record of $679,500 established on January 26, 2005. SZC's median List price at $712,000 is a shocking jump over the new record of $679,000 just set on January 26th. SZC's median Sold price also jumped to $725,000 establishing a new record high on February 3, 2005. MTY median List price at $629,000 continues to nearly match their record of $637,000 and Monterey's median Sold price of $605,000 is off $9,000 from their record high of $614,000 set on January 26, 2005.

Recent Notes - To allow for better printing of tables we have dropped the fifth week back. This issue you will see the last 4 weeks and the 8th week back.

We had been assuming that with the 2004 calendar matching 1999 starting on March 1st (because of leap-year) combined with similarity of the real estate market conditions that comparing 2004 to 1999 would be valid. This was the case from Fall 2003 through early November 2004, even with the calendars out of synch by 1-day prior to Feb 29th. Recently, discrepancies begun to emerge making it difficult to understand the market's behavior. Comparing the current 2004/05 data (inventory, sales & DUI) with each of the past 6 years individually (back to Sept 15, 1998) lots of differences emerge. Consequently, we wanted to establish a longer-term norm, like the 10-year average for sales volume. After additional research, we were able to develop was a 5-year average

Some NEW DATA: appears in the last row under initiated sales and closed sales. For example, 1643/3.49/2.20 appears in the last row of the SCC table under the 1/6/04 column. 1643 is the Median square footage for the properties that make up this data. The 3.49 is the Average (mean) number of bedrooms and the 2.20 is the Average (mean) number of bathrooms. The mean is being used for the bedrooms and bathrooms to show change as the median would almost always be 3/2. This will allow us to observe if there are large shifts in the market place that are attributing to price changes. If more larger homes sell the median SF will increase. This will also allow you to understand some of the differences between different areas. It appears that not only is SMC more expensive but the square footage is also less.

As you read current Newsletter it is particularly important to remember that just before a holiday DUI is artificially decreased. This is because the Sellers tend to pull out of the market first. Then the Buyer's will pull out of the market at the holiday causing DUI to spike. The bigger the holiday the bigger the impact. Thanksgiving is followed closely by other holidays and the accumulative impact is always significant. This will be true until after January 18th.

In doing this additional research, we expanded the our spreadsheet from 100 columns to 150 columns. This allows us to visualize the data in additional ways. In the process of doing this, we discovered something with the spreadsheet that we cannot explain. Back in mid-September we developed a macro to speed data input and minimize any errors. This macro worked until November 30, 2004, when for some reason 4-columns (F, AA, AE, & AI) were not advanced by one day but were rolled back 12 days. All other 96 columns were advanced properly. Subsequently, all columns were advanced daily as they should. This left these four columns out of synch by 12 days. The table was 100 columns wide and the macro copies the entire row, how or why these 4 columns were treated differently then the other 96 for just one day is something we don't understand. To minimize this from occurring again, we will periodically view the spreadsheet in the formula mode opposed to just the data display. This discrepancy increased the number of sales in the 10-year average subsequent to November 30th. Sales volume is also used in the calculation of our 90-day market indicator. The funny part is the unusually behavior we noticed was not associated with November 30th. However, this abnormality appears to be the cause of the third drop that we reported December 23rd. Using the correct information, this actually turned into a rebound.

We will increase this 5-year norm as more historical data becomes available. Eventually, we hope to transition to a 10-year moving average for all data. Unlike with sales data, there is no way to retroactively collect inventory data. Without inventory data DUI data is not available. We believe that by using a 5-year average in the interim our analysis will not be subject to temporary shifts in the data that we have seen recently when comparing the current data to just one year. 

We have converted the basis of the percentage of sales to the 10-year average from a fixed 10-year time period (July 1, 1992 through June 30, 2001) to a moving 10-year time period. This is to help minimize the impact of long-term growth in SCC. It still does not adjust for any growth during the past 10-years. Because the volume of transactions during the years added (2002-2004) to the 10-year moving average experienced more transactions than the years dropped (1992-1994) from the 10-year average there was about a 20 point decline in the percentages compared with what appeared in previous newsletters as a result of changing to a moving 10-year norm. But we have replaced all percentage of sales data in this and future Newsletters to the 10-year moving average even if it is for a previous period. This way the data will be consistent within any given Newsletter. However, if you re-visit a old Newsletter and try to compare that information to a current newsletter (with the moving 10-year average) you will need to make this adjustment.

Additional background information