Why does volume mean one thing in housing and another in stocks?

Housing numbers were just released, and the big news is that home sales were up 11% from the last month. That’s 11% up in volume, not price. Prices are still abysmal on a relative basis, down 12% from this time last year (and yet still too high, if you ask me). There are more foreclosures in process in California than home sales in the entire nation. However, everybody says this spike in volume is great news, and a sign the housing market is turning around.

But isn’t it true that if the stock market goes down on higher than expected volume, these same experts will call that a sign of great weakness for the equities market and a harbinger of doom?

Can somebody tell me how it is that rising volume with falling prices is terrible when it happens in the stock market but it’s an unmitigated positive when it happens in the housing market? My current guess is that they are wrong in both cases, and that you can’t glean much predictive value from volume in any market.

2 responses to “Why does volume mean one thing in housing and another in stocks?”

  1. Well to be fair I think in this case we were finding a bottom…

    And now a couple months later we are enjoying the best rally in a generation. Check out some good penny stock picks I got earlier this year. I would say now is the time to move ALL IN even 😉

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