Last Tuesday another housing market obstacle appeared in the form of Standard & Poor's Case-Shiller Home Price Index for March. Prices for 20 major metro areas dropped 0.8% for the month and were down 3.6% from a year ago. These numbers had some folks claiming the double dip in housing prices had arrived. But Case-Shiller's longer term data reveals that in their 20 measured metros, home prices are still UP 38.2% since January 2000. This shows that in real estate, you have to look at the long term picture, just like you do with your 401K. You can see a chart of the info here:
http://www.nytimes.com/interactive/2011/05/31/business/economy/case-shiller-index.html?emc=eta1#city/IND20
National average home prices are also misleading. First, the national average rarely matches the price situation in a specific local housing market. Beyond that, distressed sales at substantial discounts make up a portion of that national average price. In fact, when distressed sales are excluded, home prices are off just 0.5% year-over-year in April, according to data aggregator CoreLogic. If that's a double dip, you'd need a magnifying glass to see it. Finally, the Mortgage Bankers Association reported purchase loan demand unchanged from the prior week and up 7.6% from a year ago. But MBA researchers do expect mortgage rates to rise the last three months of this year and continue to increase gradually through 2012.
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