Case-Shiller Index Posts Another Small Decline for Miami Real Estate

posted on April 27th, 2010 filed under: Financial Responsibility, Real Estate Market Data

The Case-Shiller Home Price Index posted another small decline in Miami real estate for the three-month period ending February 2010.  This marks the fifth straight month of small monthly declines.  A similar pattern is playing out in the New York metro area, which posted its sixth straight small decline.

Standard & Poor's Case-Shiller Home Price Index -- Miami -- Feb. 2010

The real estate bubble in Miami and Coral Gables pushed the Case-Shiller index from a level of about 100 in January 2000 to nearly 280 in January 2007.  Perhaps needless to say, incomes did not rise 180% over that period, and as the bubble inevitably burst, the Case-Shiller index collapsed to about 145.

Since hitting a low of about 146 in May 2009, the Case-Shiller index for Miami has moved essentially sideways.  Despite this stabilization, questions remain about real estate values in Miami and Coral Gables:

  • Incomes have risen about 25% since 2000, not 45%.
  • Insurance costs have rocketed higher, driving up the cost of owning property everywhere in South Florida.
  • Public budgets continue to be balanced on the backs of new buyers who subsidize the capped property assessments and taxes of pre-existing owners.

Responsible buyers, and banks that have returned to old-fashioned lending standards, are again taking these ownership costs into account.  Sideways may be the new Up in Miami and Coral Gables real estate.

The Case-Shiller index is maintained by Standard & Poor’s, and tracks repeat sales of the same homes, thus avoiding the skew that can result from changes in the mix of expensive versus inexpensive homes sold.

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posted by // This entry was posted on Tuesday, April 27th, 2010 at 10:26 am and is filed under Financial Responsibility, Real Estate Market Data. You can follow any responses to this entry through the RSS 2.0 feed.

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