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How The S&P/Case-Shiller Home Price Index Over-Simplifies Real Estate Markets

The Case-Shiller Index says that housing is down, but that doesn't apply to every homeowner because real estate prices are different in every region

The headlines say that home prices are down 6.7 percent from a year earlier.  It's important to recognize that this is a national figure.

"National" has nothing to do with real estate.  Real estate is local.

The chart above is from the latest S&P/Case-Shiller home-price index and -- averaged out -- shows that home prices are declining nationwide.  Some areas are showing growth (or flatness):

  • Charlotte
  • Dallas
  • Portland
  • Seattle

And, in every town included in the survey, there are neighborhoods that are faring quite well, despite an overall sluggishness. 

Real estate prices are local.  Street by street even.  National surveys like the S&P/Case-Shiller home-price index paints a broad picture of our nation's real estate market, but that level of reporting doesn't do much on a level that's actually relevant to Americans.

Source
Pace of Decline In Home Prices Sets a Record
James R. Hagerty And Kelly Evans
The Wall Street Journal Online, December 27, 2007
http://online.wsj.com/article/SB119867779499850669.html

Posted by Bill Murphy on December 27th, 2007 9:36 AMPost a Comment (0)

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