Home prices down nearly 30% !!!!
What, you missed the news which was reported this week? Perhaps you were too focused on watching the stock market reach record highs.
This week’s Case-Shiller report included the following: “Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 29-30%. The recovery from the early 2012 lows is 8.7% and 9.3%, respectively.”
In simple terms, while prices nationally are up nearly 10% from their lows, they are still DOWN almost 30% from their 2006 highs.
To put that in stock market terms in a week when the Dow Jones Industrial Average broke 15,000, the equivalent for housing would be 10,500. That doesn’t sound so good.
One of the main reasons the Federal Reserve has been keeping interest rates so low for so long has been to reignite the housing market, both as a driver of economic growth and as a way to help individuals and financial institutions recover. Assuming the Fed reads Case-Shiller, it is probably a reasonable assumption that interest rates are going to continue to remain low for some while to come.
For more local interest Case-Shiller has a Boston Index. Reinforcing the criticism that Case-Shiller uses areas that are two widespread to be useful, the “Boston” index covers the Boston-Cambridge-Quincy, MA-NH Metropolitan Statistical Area, and consists of the counties of Essex MA, Middlesex MA, Norfolk MA, Plymouth MA, Suffolk MA, Rockingham NH, Strafford NH!
That “Boston” Index dropped 20% peak to floor and has since recovered 6%, leaving it still down 16%. For what that is worth.
thank you, andrew.
would love Case/S to do the Marblehead index regularly for us. given 70% (last i heard) of property movement in mhd is intra in nature, that would be the mother load of meaningful data.
jody
Jody: I am not so sure it would be meaningful. MHD SFH sales look like they will be about 220 – 240 this year and we have some 6,000 SFHs, so we turn over about 4% of our stock each year. Since Case-Shiller only uses repeat sales of the same property it would take an awful long time to get any meaningful statistics for such a small market.
Case- Shiller is useful to the Federal Reserve because they analyze very large numbers of transactions for the country as a whole. What that means, of course, is that many parts of the country which did not suffer collapses are seeing a housing market boosted by the very low interest rates that the Fed is keeping in place to try to get the worst areas moving upwards.