Archive for Case-Shiller Index
Is This Bad News For Lake Geneva Real Estate Home Sellers?
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Standard & Poors released the September Case-Shiller Index Tuesday. The Case-Shiller Index is a home-value tracker. The report shows home prices down 0.7% from August and values fading, in general.
Case-Shiller representatives assessed the findings as “another weak report; weaker than last month,” citing deterioration in 18 of 20 tracked markets. Upward pricing momentum from the summer is slowing and values remain 30% off the market’s June 2006 peak. It could spell bad news for home sellers of Lake Geneva real estate this winter.
That said, the Case-Shiller Index is imperfect; its methodology flawed. The index is not meant for use by individual buyers or sellers — for 3 reasons.
First, the Case-Shiller Index reports on a 2-month delay. Today is December 1 and we’re discussing data from September. In the 8 weeks since, the economy has shifted to a net jobs gainer, and the Federal Reserve has committed to $600 billion in re-investment. These are major developments that weren’t a part of September’s housing market, but are relevant today.
Especially because employment is largely believed to be a keystone to housing.
Second, the Case-Shiller sample set is limited to just 20 cities nationwide. This means that most U.S. home sales are specifically not included in the Case-Shiller Index’s monthly findings. Lake Geneva real estate is definately NOT one of the cities included in this report.
And that ties into reason number three — all real estate is local. No matter what the Case-Shiller Index says about the country, what matters to your local market is what’s happening in your local market. Each neighborhood has its own housing economy and that’s something that can’t be captured by a national report.
Case-Shiller Posts 16th Straight Month Of Home Price Improvement
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According to the Standard & Poors Case-Shiller Index, home values rose 5 percent in June versus the month prior, and 4 percent from a year earlier. It’s the 16th consecutive month in which Case-Shiller reported an increase in home values and the third straight month of outstanding results.
That said, homeowners and home buyers of Lake Geneva real estate would do well to temper Case-Shiller enthusiasm. The June figures are issued on 60-day delay and, over the last 60 days, housing data has been lackluster at best.
- Existing Home Sales are down 27 percent
- New Home Sales are down 12 percent
- Homebuilder confidence is down
Stories like these highlight a key weakness of the Case-Shiller Index — it’s out of date as soon as it’s published. Because of this, the Case-Shiller Index relevance to everyday Americans is muted. People don’t buy homes in the “60 days ago” real estate market, after all.
June is ancient real estate history.
However, the Case-Shiller Index does have its place. As the most widely-followed, private-sector housing tracker, the index is used to help make policy decisions and to shape Wall Street’s expectations of the economy. This means that a strong Case-Shiller reading can cause Lake Geneva mortgage rates to rise, and a weak Case-Shiller reading can cause rates to fall.
Tuesday, mortgage rates fell.
The Headlines Were Overly Rosy On February’s Case-Shiller Index
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Earlier this week, Standard & Poors released its February Case-Shiller Index, a home price tracker for select metropolitan areas. I w ill give you the numbers for Lake Geneva real estate and Walworth County further in this post.
Overwhelmingly, home values fell in the 20 markets tracked by the Case-Shiller. Only San Diego showed a modest increase. The other 19 markets averaged a 1.23 percent decline between January and February. The market for Walworth County and Lake Geneva real estate rose 12.5% from January to February 2010 in the total number of homes sold. As this number increases property values tend to increase as well.
However, that’s not the story you read in the most papers. Instead, headlines read that home values were up in the United States, citing annualized data.
Unfortunately for active home buyers and sellers, year-over-year data isn’t all that helpful when making a real estate decisions. It’s the month-to-month data that matters. Month-to-month changes in home prices are what defines a housing market. Month-to-month is what sets the tone for contracts and negotiations on a purchase.
The rosier, annualized data published this past week just doesn’t capture the reality of what was the February 2010 market. And even then, the data is somewhat useless because it’s from February and May will be upon us next week.
Case-Shiller is on a 2-month lag — hardly reflective of the “right now” of Lake Geneva real estate.
When you’re looking for real estate data that’s actionable, consider using sources that are more “real-time.” A Lake Geneva real estate agent may be the right place to start. Because for all the data that Case-Shiller and the other housing indices collect, it can never be as relevant to your individual needs as a well-executed, timely market analysis. I am fortunate to work with so many talented real estate agents. I would the opportunity to introduce you to one of them.
Travis K. Egan