Jason Bernabei, TriCastle Realty
DEL MAR, April 2 2012 – Goooooood Monday Morning San Diego!! Spring is here and arriving with it is more closure on 2011, as well as the first month of 2012. The Standard & Poor’s Case-Shiller Home Price Indices have been long revered for the data they provide. Their recent findings suggest more mixed news for Housing. Surprise-surprise.
While overall, an abundance of recent data suggests that the U.S. housing market is in recovery, the aforementioned monthly S&P/Case-Shiller Index indicates that values rose in just 3 of 20 tracked markets between December 2011 and January 2012. Thusly, 17 tracked markets showed home prices still in decline, including yours truly, America’s Finest City, sunny San Diego. While the S&P’s findings are certainly something a humble industry professional like myself would not dare defy, I am reminded of an old adage that I’ve oft found too easy to disprove: “Numbers don’t lie.” Oh, but they do, and in all too many instances.
There are too often numerous considerations when analyzing data of this variety, which allows for competing conclusions. For example, the Case-Shiller Index is based on changes in home prices of a single home, through successive sales. This means that in order to determine its home price index, the Case-Shiller searches for sales of the same home over a period of time and then calculates the difference in contract price. This approach can distort the home price tracker downward during times of weak economy because there is no distinction made for homes sold in foreclosure, or as a short sale.
More consideration in the Case-Shiller Index is that the methodology omits all home types that are not of the single-family residence variety. This means that multi-unit homes and condominiums are excluded from the Case-Shiller Index model. Right here in SD, condos and townhouses account for a large percentage of overall sales. Further, the CS Index is published with a 60 day lag, making it an ill-fit tool for prospective buyers and sellers who need current data in their assessments.
Also, according to my good friends at the National Association of REALTORS®, in January 2012 35% of ALL homes nationally were deemed "distressed.” The aforementioned 1% decline in SD as stated by the CS-I is something that must be held against that bit of data, since the CS-I doesn’t account for it.
Since the beginning of the last quarter of 2011, the U.S. economy has added more than 1 million jobs. According to Federal Reserve Chair Ben Bernanke, the economy has moved into “moderate expansion.” But data that's roughly two seasons old does little to assist prospective home buyers and sellers today.
So in conclusion, the CS-I is a nice tool to have in one’s arsenal, an appropriate gage in highlighting the U.S. housing market on the whole, and as it has existed in the past. However, for real-time market data, you need an agent who knows what they are doing, and can analyze numerous angles of hard, current available data. So please contact me ASAP for your Housing needs, and I will be prepared to serve you in doing just that!
You contact me, Jason Bernabei, at jasonb@tricastle.com, and check me out each and every Monday on www.therealtyinsiders.com for more, and be sure to tune in to see myself, and local industry experts talking real estate on “The Realty Insiders,” THE ONLY real estate show in town!
Jay's Outlook: partly sunny
Jason Bernabei, TriCastle Realty
