Housing Market Bottomed?
Has housing finally bottomed? After 3 years of terribly negative data, 19 of the 20 markets tracked by Case-Shiller improved last month. That’s 5 months in a row of good data and the best showing in over 3 years!
Case-Shiller is not perfect, however. It’s limited to 20 U.S. cities, which encompasses just 9% of the U.S. population. Also:
- It is on a 2-month lag, so it indicates how housing was, not how it currently is.
- It ignores locality, grouping city neighborhoods into one big lump. Considering how badly outlying areas are hurting compared to close-in properties (especially in Portland), this is a big deal.
It still is a good indicator of an improving economy. When housing cracks first started formed in 2005 and 2006, Wall Street continued at a torrid pace while Case-Shiller called for a collapse. Turns out, both sides were wrong, but Case-Shiller earned a ton of respect for its (overly doomsday) call.
These days, the Case-Shiller Index is the go-to barometer for home values nationwide.
Getting back to June data, because Case-Shiller says home prices are “on an upswing,” we can assume it means good things for the housing market, in general.
This isn’t all good news. For a first time home buyer facing higher prices and the expiration of the $8,000 tax credit, this means increased competition for properties.
If you’re on the fence about buying a home or wondering if the time is right, according to Case-Shiller, the “right time” may have been a couple months ago. With prices on the upswing, homes may only get more expensive.
If you have any questions or would like to get pre-approved for a loan, send me an email or give me a call!
