Buyers took an early holiday in November but appear to be back in business now

Here's what happened to Dane County single family home sales in November. After two straight months of year-over-year sales increases, November sales dropped by 36%.

When you compare November of 2008 to the 4 previous Novembers, it becomes much more clear how much single family sales have dropped since the market peak. Sales in November were 54% off the peak November from 2004.

Clearly buyers stood on the sidelines after all of the tough financial news starting making national headlines in September and October. But now we have another dynamic at play. Mortgage rates have plunged in December (down to about 5% today), and consequently we're seeing a lot of buyer activity in the last two weeks, especially in the more affordable price categories.

Given what we're experiencing right now, I expect the December sales numbers to be lower on a year-over-year basis - as well as January - but I would not be surprised at all to see the February numbers rise to the upside.