Case Shiller Home Prices

Case Shiller Home Prices

Case Shiller Home PricesThe news story started this way, “2015 said farewell with reports on Case Shiller home prices, pending home sales, and consumer confidence. The details:

Case-Shiller Home Prices Post Double Digit Gains in October

According to Case-Shiller’s 20 City Home Price Index, Denver, Colorado, Portland, Oregon and San Francisco, California tied for the highest home price gains in October with year-over-year home price gains of 10.90 percent. Lowest annual price gains were posted by Chicago, Illinois at 1.30 percent followed by Washington, D.C with a year-over-year –reading of 1.70 percent. Home prices rose at their fastest rate since August 2014 according to Case-Shiller.

While Case-Shiller’s 20-City Index remains 11 to 13 percent below 2006 peak home prices, the index is approximately 36 percent higher than lowest home prices posted in 2012.

You’ve probably heard the Case-Shiller Index mentioned repeatedly in the news. Maybe you know it has something to do with home prices and the housing market. The index, formally known as the S&P/Case-Shiller home-price index, is actually not one index at all. There are really several indexes:

  • The national home price index, which covers nine major census divisions. It is calculated quarterly and published on the last Tuesday of February, May, August and November.
  • The 10-city composite index, which covers Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco and Washington, DC.
  • The 20-city composite index, which includes all of the above cities plus Atlanta, Charlotte, Cleveland, Dallas, Detroit, Minneapolis, Phoenix, Portland (Oregon), Seattle and Tampa.
  • Twenty individual metro area indexes for each of the cities listed above.

The index was developed by three economists: Allan Weiss, Karl Case and Robert Shiller, who started keeping track of home resale prices and calculated the home price index back to 1890. That index is normalized to have 1890 start with a value of 100. If, for example, you bought your house in 1995 at $155,000 and sold it today for $475,000, it would be considered a home resale and figure into the index. Calculating these home resale prices over time would give you a feel for the direction of home prices.

It is interesting that Schiller argued that contrary to popular thinking, there is not a continuous uptrend in home prices. He argued that “…since homes are relatively infrequent purchases, people tend to remember the purchase price of a home from long ago and are surprised at the difference between then and now. However, most of the difference in the prices can be explained by inflation.”

Obviously, if you’re looking to buy or sell a residential property, you’ll be interested in whether home prices are going up or down and by how much. If you’re selling and prices seem to be increasing, you might want to hold off selling while you wait and see if prices keep going up. If you’re buying and you see prices going up, you might want to speed up your purchase decision while there are still deals to be had. Or if prices are declining, you might want to see if you can hold off on your purchase while prices continue to sink. Of course, no person or index can really predict what will happen to home prices.

Styl Properties, Inc. is here to help homeowners out of any kind of distressed situation.  As investors, we are in business to make a modest profit on any deal, however we can help homeowners out of just about any situation, no matter what!  There are no fees, upfront costs, commissions, or anything else.  Just the simple honest truth about your home and how we can help you sell it fast to resolve any situation.

Give us a call today at 402.909.0686 to let us know what YOU need help with!

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