Something is out of whack for housing (and it’s not all this snow)

Kal Eiselein | Flickr Vision | Getty Images

Kal Eiselein | Flickr Vision | Getty Images

The housing market has been abnormal in many respects over the past few years. Analysts at Goldman Sachs point to an elevated level of distressed sales, the first-time homebuyer tax credit in 2009 and 2010, and significant investor activity in 2012 and 2013.

“Now that the housing market is normalizing with fewer distressed sales and less investor activity, applying these unusual seasonal factors may distort housing indicators,” the analysts wrote in a report.

Most housing data, that is, sales, prices, starts and inventory, are seasonally adjusted. That is because there are definite seasonal buying and selling patterns. People don’t usually buy homes around the holidays. Spring is always busy for sales of larger homes because families prefer to move during the summer, without disrupting school for their kids. Smaller homes tend to sell in the fall, when first-time buyers are a larger share of the market.

Those seasonal patterns, however, have been turned upside down, as the foreclosure crisis sent a glut of distressed properties on to the market, which were swept up, regardless of the season, by all-cash investors, who bid up the prices faster than expected. First-time buyers are at their lowest share on record in the housing recovery.

“We find that distressed sales and investor activity during the last few years have caused recent house price data to be ‘over-adjusted’ and home sales data to be ‘under-adjusted,’ leading to stronger price readings and weaker sales readings in the winter months,” noted the Goldman Sachs analysts.

(Read moreFour million more homeowners now ‘above water’)

Investor activity muted the seasonal sales patterns, because investors had no seasonal pattern and drove sales over the past two years in distressed markets. While sales usually slow in the winter, they did not in 2012 and 2013, because investors were busy.

Now, as investors move out, and regular owner-occupant trends retake the market, the seasonality is all out of whack. There are fewer sales not because of real demand but because of reduced investor demand.

The same can be said for prices. Usually house prices are higher in the spring and summer because, as noted, families seeking larger houses command the market. Distressed sales, however, which took place throughout the year at huge discounts, distorted the patterns, pushing home prices lower for a time.

Now that investors are moving out and regular buyers are taking over the market, even in winter, the price jumps year to year are much bigger. That is not because real home values are that much higher but because the patterns were distorted.

(Read more: Housing ‘nirvana’ around the corner: Star analyst)

“Because we are moving from a period with abnormal seasonal patterns to a period with normal seasonal patterns, the seasonal factors derived from previous years may not be appropriate for a changing housing market,” said the Goldman Sachs analysts.

So how much are the housing data now distorted? Hard to know exactly. Analysts say it could be large. January sales may be actually 6 percent higher than currently being reported.

Price gains are harder to measure, but could be slightly lower than currently being reported. That may mean that home sales data will appear weaker than they really are through February and March but stronger than they really are from April through August. Prices will be artificially strong in the first half of this year and artificially weak in the second half.

(Read more: CEOs are bucking housing’s bad numbers)

These seasonal adjustments, according to analysts, are not the biggest driver of the recent housing data, but are worth attention. It is still colder and snowier this winter than it has been in many years, and, at least on Monday, the snow just keeps coming.

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By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.

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