September 24, 2013 Case-Shiller Home Price Report

24 09 2013

middle of the tree“Home prices gains are holding their 12% annual rate of gain established by the two Composite indices in April,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices…Since April 2013, all 20 cities are up month to month; however, the monthly rates of price gains have declined. More cities are experiencing slow gains each month than the previous month, suggesting that the rate of increase may have peaked.”

Peaked in this case is only relative to what we have been experiencing as rapidly increasing prices in much of the country.  This is good news that it is slowing down and that we get to a balance of a little up and a little down now and then.  The stock market does it all the time.  Big gains are almost always followed by sharp declines.  This is THE MIDDLE….

Sometimes the middle is bad like being stuck between a rock and a hard place or between two sides of a fence.cow on gate  However, being in the middle of extremes such as safety and danger can feel pretty nice.cheetahs  Let’s take a quick glance at the Case-Shiller Home Index of the 20-City Composite (the composites are all close in comparison) in the past—in 2000 it was given a 100 level rating baseline and went up slowly until Fall of 2004 where it picked up the pace and peaked in August of 2006 at a 206.18 level.  Then, we bounced along the bottom going up and down from April 2009 to March of 2012 with lows of 139.26 in ’09 and 134.07 in ’12.  Now, we are climbing back up again with a new level of 162.49 which is equivalent to somewhere between May and June 2004.

How did that feel?  Not so great huh?  The point really is that slow and steady growth is healthy and comfortable but the extreme highs and lows don’t really feel good at all in the big picture.

The bad news, according to David Blitzer in an interview earlier this year, is that cities with over 20% increases in price may encounter a 2nd bubble bursting such as Vegas, LA, San Diego and San Francisco.  The good news is that 16 other cities were under that.  Others, like Cleveland, New York and Washington D.C. are taking their own sweet time in increasing well under 10% for the year.

Portland, you are sitting pretty at 12.2% with a level of 157.26.  That is almost a year ahead of the rest of the national averages putting us at levels between August and September of 2005!

And, that, is a nice and solid position to be in.

malcolm-in-the-middle

 

The Full Report Here

The Septmeber 24 Case-Shiller Report

 

Dustin Miller
Broker/Analyst

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