On A Monthly Basis, Home Values Look Better Than Press-Reported Annual Figures
May 27th, 2009 categories: Buyers, Market Trends, Sellers
Each month, researchers measure home values in 20 large U.S. cities, then compile their findings in a report called the Case-Shiller Index. It’s a popular measurement of housing health across the country, but it’s far from perfect.
As 3 examples:
- It gives more weight to expensive homes than inexpensive ones
- Its sample set includes just 37 states of 50 states
- Real estate isn’t a “national” market — it’s local
All that said, however, the data is still important. The Case-Shiller Index helps identify broader trends in housing and it’s widely believed that the economy won’t recovery until the sector starts to stabilize.
We may be at that recovery point now.
Despite newspaper headlines blaring about 19 percent drops from March 2008, the month-to-month values appear to be stabilizing and the latter is the more important development. 15 of the 20 markets covered by Case-Shiller either improved, stayed flat, or declining by 0.2 percent or less.
Versus 2008, the rate of speed at which home values are falling is slowing.
Furthermore, because the Case-Shiller Index is on a 2-month delay, it doesn’t account for all of this year’s Spring Buyers, or first-timers taking the $8,000 first-time homebuyer tax credit.
Two months don’t make a trend, but if Case-Shiller Index continues to report similar data for April and May, it could be the signal that housing finally bottomed.
