The Headlines Were Overly Rosy On February’s Case-Shiller Index

Filed under Case-Shiller Index by on April 30, 2010 at 7:47 am {no comments}

Case-Shiller Change In Home Values Jan-Feb 2010

Earlier this week, Standard & Poors released its February , a home price tracker for select metropolitan areas. 

Overwhelmingly, 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.

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 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 real estate in Oak Park.

When you’re looking for real estate data that actionable, consider using sources that are more “real-time”. A 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.

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FHA Interest Rate Predictions: Week of April 26, 2010

Filed under Weekly Review by on April 26, 2010 at 7:47 am {no comments}

Mortgage markets worsened last week in see-saw trading. By the time Friday’s market closed,  had moved higher.

The biggest stories of last week were actually non-stories.

First, the ash cloud from Iceland’s Eyjafjallajökull volcano dissipated, allowing warehouses to move inventory, airlines to move people, and businesses to move product.  In addition, Greece moved closer to securing emergency funding that will help it stave off default.

When these two issues were threats earlier in the month, mortgage bonds rallied on safe haven buying, driving rates down. As the threats lessened over the course of last week, however, mortgage bonds sold off and rose.

By contrast, this week features lots of stories. Economic data will be at the forefront, as will the Federal Reserve which meets for one of its 8 scheduled meetings of the year.

  • Monday : Greece is expected to announce an aid package
  • Tuesday : reports on from February
  • Wednesday : Fed adjourns from its 2-day meeting
  • Thursday : Initial Unemployment Claims are released
  • Friday : GDP and numbers are released

Furthermore, Wall Street will have its eye on the Senate’s questioning of key employees in the wake of the SEC’s fraud charge.

In general, news that’s “good” for the U.S. economy will be bad for mortgage rates, and vice verse.  And with mortgage rates changing as quickly as they have been, rates could really rise in a hurry.

The best defense against rising mortgage rates is to execute a rate lock. If you’re nervous about rates moving higher, call your loan officer and execute your rate lock today.

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Battered Housing Market Is Recovering

Filed under Case-Shiller Index by on February 24, 2010 at 7:47 am {no comments}

The was released on Tuesday.  It revealed only a 2.5% drop in , significantly better than the 8.7% drop reported after 2009 Q3.

According to Case-Shiller representatives, we’re seeing a healthier market than one year ago.  We’re also seeing that the market is returning to a normal healthy rate of recovery after last summer’s incredibly hot market.

Of note, 5 markets didn’t decline:  Detroit, Los Angeles, Las Vegas, Phoenix and San Diego.

They were the hardest hit in the beginning and are now showing the first signs of strength as the market returns.

The Case-Shiller Index isn’t without flaws.  For example:

  1. The data is two months old
  2. It is only 20 cities
  3. Real estate is local, not national

Still, the index carries weight as the broadest private-sector index out there.  Housing is key to the economic recovery and we’re seeing good signs in housing.

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