September's Case-Shiller Index and Yardley, Newtown, Bucks County.
Standard & Poors released the September Case-Shiller Index Tuesday. The Case-Shiller Index is a home-value tracker. The report shows home prices down 0.7% from August and values fading, in general. As you can see from the above chart, Yardley and other areas, in Bucks County, do not appear anywhere on this chart. That’s the problem with using these national statistics, to try and predict or even understand where the real estate market is heading, in your back yard.
I am met with several prospective sellers both in Yardley and Newtown in Bucks County, over the past few days, and the question always is, first, should we put our house on the market during the holidays, and second, whats the market doing?
If you rely on broad, national statistics, like the Case-Shiller index, you will not understand what is going on locally.
Case-Shiller representatives assessed the findings as “another weak report; weaker than last month”, citing deterioration in 18 of 20 tracked markets. Upward pricing momentum from the summer is slowing and values remain 30% off the market’s June 2006 peak.
Depsite the somewhat depressing numbers nationally, prices in Bucks County, overall, have actually increased by 4.4% through October! Clearly, as I have reported on numerous occassions, it is a tough market for sellers. However, please keep in mind that homes in Yardley, Newtown and all over Bucks County, that are priced correctly and marketed properly, are selling. I will explain a bit about why the Case-Shiller index is imperfect and flawed.
The Case-Shiller Index is imperfect; its methodology flawed. The index is not meant for use by individual buyers or sellers — for 3 reasons.
First, the Case-Shiller Index reports on a 2-month delay. Today is December 1 and we’re discussing data from September. In the 8 weeks since, the economy has shifted to a net jobs gainer, and the Federal Reserve has committed to $600 billion in re-investment. These are major developments that weren’t a part of September’s housing market, but are relevant today.
Especially because employment is largely believed to be a keystone to housing.
Second, the Case-Shiller sample set is limited to just 20 cities nationwide. This means that most U.S. home sales are specifically not included in the Case-Shiller Index’s monthly findings.
And that ties into reason number three — all real estate is local. No matter what the Case-Shiller Index says about the country, what matters to your local market is what’s happening in your local market. Each neighborhood has its own housing economy and that’s something that can’t be captured by a national report.
If you want to understand what is happening in your neighborhood, email me and request a market snapshot of your neighborhood. I will email a report that will show you exactly what has sold in your specific neighborhood. It will include homes for sale, as well as what has sold, including days on the market, and discounts from asking price. Only by looking at very local information, can you truly understand what is happening with real estate in your back yard.
Continue Reading > Add a Comment |