Archive for January, 2013

S&P Case-Shiller Says Miami Up, New York Down

posted on January 29th, 2013 filed under: Real Estate Market Data

The S&P Case-Shiller Home Price Index for Miami posted a modest gain for the three-month period ending November 2012.

S&P Case-Shiller Home Price Index -- Miami -- Nov 2012 (from Jan 2008) (Chart, Graph)Source:  Standard & Poor’s

Prices gained 9.9% year-over-year (Nov. 2011 to Nov. 2012).  That’s a fast pace for real estate, and certainly far quicker than incomes have risen.  No doubt the Fed-sponsored drop in mortgage rates helped.  And there could be a bit of an echo bubble in psychology, as media reports have served up a steady drumbeat of housing-recovery stories.

Will it continue?  Shiller himself is skeptical, writing in a recent New York Times piece that “the tea leaves don’t clearly suggest any particular path for prices, either up or down.”

This much is certain:  Even if prices continued to rise 9.9% annually, it would take over 6 years for prices to get back to their bubble high.

S&P Case-Shiller Home Price Index -- Miami -- Nov 2012 (Chart, Graph)Source:  Standard & Poor’s

The fact that it would still take so long at such an unrealistic pace for prices to regain their high is a testament to the mendacity of the bankers, brokers and buyers who inflated the bubble.

Meanwhile, in New York, the real estate market remains moribund.

S&P Case-Shiller Home Price Index -- New York -- Nov 2012 (Chart, Graph)Source:  Standard & Poor’s

Not quite back at its low, and maybe there’s a broad, bowl-shaped bottom taking form, but that’s about the best you can say for it.

Nonetheless, the crash already happened, and prices have reverted close enough to the long-term trend that the risk of loss has diminished.  If you find a good deal, and plan on holding a property for a long time, buying may make sense, particularly if you plan on financing at currently low rates.

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