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Case-Shiller: DC and National Home Prices Increase

by UrbanTurf Staff

The latest Case-Shiller report released this morning showed that national home prices rose ever so slightly between July and August 2011, but that prices dropped 3.8 percent across the country since August of last year.

In what has become a certified trend over the past several months, the index reported that home prices in the DC area increased on both a monthly (+1.6%) and annual (+0.3%) basis. In another trend that seems to be constant, DC and Detroit were the only two cities in the 20-city index that showed year-over-year home price increases.

image
Case-Shiller August 2011.

The area price increases between July and August were most noticeable in the low tier (homes under $293,756) and the middle tier (homes between $293,756 and $457,827). Prices for homes in the high tier (homes priced above $457,827) actually dropped slightly.

From David M. Blitzer, Chairman of the Index Committee at S&P Indices:

“In the August data, the good news is continued improvement in the annual rates of change in home prices. In spring and summer’s seasonally strong period for housing demand, we cautioned that monthly increases in prices had to be paired with improvement in annual rates before anyone could declare that the market might be stabilizing. With 16 of 20 cities and both Composites seeing their annual rates of change improve in August, we see a modest glimmer of hope with these data.”

When considering the Case-Shiller findings, recall that the index is based on closed sales and home price data from 5 to 7 months ago. Another thing that is important to note is that the main index only covers single-family home prices, so co-op and condo prices are not included in the analysis that is widely reported. Chicago and New York City are two of the cities where Case-Shiller provides a separate index for condo prices, but DC does not have a similar index.

See other articles related to: home prices, dclofts, case-shiller

This article originally published at https://dc.urbanturf.com/articles/blog/case-shiller_dc_and_national_home_prices_increase/4436

4 Comments

  1. Janson said at 1:32 pm on Tuesday October 25, 2011:

    The national home price tiered index levels released by Case-Shiller today (that you seem to be reporting on) uses a moving average of home prices at closing in June, July, and August. Since we are near the middle of October, that would make the index level reflect closing prices from 1.5 to 4.5 months ago, so your sentence describing the index coverage appears to be inaccurate.

    Is UrbanTurf adding an assumed 90 day closing period on to that date to come up with the 4-7 month lag? I guess it makes sense that some of the prices that make up the index stopped being negotiated as long as 7.5 months ago.

    But I think it would be more fair to assume some 30 day closings and say 7.5 to 2.5 months ago…

    From the S&P site:
    * The S&P/Case-Shiller Home Price Indices are calculated monthly using a three-month moving average and published with a two month lag.

    Also, Chicago and NYC both have Case-Shiller Condo indexes which are arguably the single most reliable indicator of condo prices in those markets. Case-Shiller does not currently include DC in the Condo report.

  1. Jonathan Miller said at 1:58 pm on Tuesday October 25, 2011:

    Janson - CSI lags the meeting of the minds (contract signing) by an average of 6 months.  If we pick the mid point of the moving average as say, 7/15/11 and pick 90 days for the difference between agreed price/terms and closing date (60+ days contract to close plus 15-30 days to sign contract after offer accepted) its more like April 15th on average when the market is established.  Thats roughly 6 months old and shows why CSI is disconnected from actual conditions.  The condo indexes show the same lag and local data sources in both those markets are a lot more current/useful.

  1. Mark Wellborn said at 2:55 pm on Tuesday October 25, 2011:

    Janson,

    In addition to what Jonathan said, we have clarified the article based on your comment to make it clear that Chicago and NYC are two of the cities for which Case-Shiller has condo price indexes.

    Mark Wellborn
    Editor

  1. Janson said at 1:35 pm on Wednesday October 26, 2011:

    Miller,
    Thanks for the great explanation of where the lag is coming from.

    And thanks to UrbanTurf for being the best DC real estate blog.

    Janson

Comments are closed.

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