Real Estate is Local
For August, the Case-Shiller Index showed annual home values improving across 19 of 20 U.S. markets. It’s the first time in 3-plus years that the benchmark housing index has shown such strength.
According to a Case-Shiller Index spokesperson, “The rate of annual decline in home price values continues to improve.”
It’s yet another sign that housing may have already bottomed.
However, just because the Case-Shiller Index shows a stabilization in home values, that doesn’t necessarily make it true. This is because real estate happens on the local level and the Case-Shiller Index is more “national”. It tracks data in just 20 U.S. cities.
Homeowners everywhere else are unaccounted for.
Numbers Can Paint an Inaccurate Picture
Furthermore, even within the 20 tracked Case-Shiller markets, there’s no allowance for the natural sub-markets that exist. Some neighborhoods under-perform and some neighborhoods out-perform.
Case-Shiller treats them all the same.
Despite its imperfections, though, the Case-Shiller Index remains a helpful, broader measurement of U.S. real estate. Economists believe that housing led the U.S. into the recession and they believe housing will lead us out, too.
If that’s true, August’s Case-Shiller data is another step in the right direction.
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