At long last, another voice is crying in the statistical wilderness of national home price changes.
It's saying what I've been saying in this space every few months for going on five years now:
The Standard & Poor's Case-Shiller Home Price Index, the one ballyhooed every month, every quarter and every year, doesn't amount to a big hill of beans for most of us.
Thank you, Dan Green. I have felt so alone.
Green is a multistate loan officer with Cincinnati's Waterstone Mortgage Corp. He has a blog at http://themortgage
If one more person speaks up in the media, mainstream or social, we've got a movement, two being a coincidence, three a trend, as they say. Because what they say is just wrong.
S&P bills the index, named for economists Karl Case and Robert Shiller, as “the leading measure of U.S. home prices.” People use it to draw unwarranted conclusions about local housing markets. It scares potential buyers and sellers out of those markets for nothing.
Case-Shiller reported Tuesday that prices dropped again in November — 1.3 percent from October and 3.7 percent compared with November 2010. Headlines sprouted like spring dandelions: “Case-Shiller Craters Again ...,” “No Bottom for Housing ...,” “Housing Woes Reflect Nation's Pain,” “History Says Home Real Estate is a Bad Investment.”
Hold your houses, y'all. Lend an ear:
“The good news for folks betting on a housing recovery is that, as buyers and sellers in today's real estate market, we can safely ignore the Case-Shiller Index's findings,” Green wrote. “Don't let the data get you down.”
Ah, preach it, brother.
Balderdash: Green points out what has been my main gripe: It doesn't include enough cities — just 20 in one index and 10 in another. Further, four of the 10 biggest cities in the country aren't tracked: Houston and San Antonio in Texas, Philadelphia and San Jose, Calif. But two cities well out of the top 10, and out of the top 20, are included: Minneapolis and Tampa, Fla.
Most importantly here, neither Oklahoma City nor Tulsa are included. Or Moore. Or Edmond. Or Durant. Or Woodward.
“The 20 Case-Shiller cities account for fewer than 1 percent of all U.S. cities. In other words, the ‘national figures' of the Case-Shiller Index aren't really national,” Green wrote. Amen.
Hooey: The index tracks repeat sales, but only single-family detached — no condos, no multifamily and no new construction.
Twaddle: S&P publishes on a 60-day delay, so Case-Shiller “is reporting on a housing market that no longer exists,” Green wrote. “This is because home sales that closed in November are actually based on purchase contracts for homes written between August-October — half a year ago! — and it's these contracts upon which the Case-Shiller Index is based.”
Amen, and amen.
Like any good preacher, Green ended with a note of hope:
“Historical data helps economists and policymakers understand the long-term trends of U.S. housing, but it does little good for today's buyers and sellers in need of accurate, real-time data. For that, you need something current. If you're watching the Case-Shiller Index and looking for meaning, don't. You can't. Talk to a real estate agent instead.”