Case-Shiller announced today that home prices rose in June from May by 1.4% for both the 10-city and 20-city indexes.
I'm still trying to figure out why this makes headlines and why people think that this indicates that the housing market is bottoming.
Of course home prices rose from May to June. They did it in 2007 and 2008 too. They do it every year. It is called a seasonal variance.
According to the NAR the median home value rose from $222,700 to $229,000 in May of 2007 to June of 2007.
And then again in 2008, the median home value rose from $207,900 in May to $215,000 in June.
And here we are in 2009, and the median home value according to the NAR rose from $174,700 in May to $182,000 in June.
It's what home values do.
In order to better understand real estate trends you need to compare year over year data. Just as a weather man wouldn't compare June temperatures to those in December, you can't compare month over month data unless the data is seasonally adjusted. The Case-Shiller index is not seasonally adjusted.
According to Case-Shiller, year over year, from the 2Q of 2008 to the 2Q of 2009, home values have fallen by -14.9%. Over this same time frame, the NAR reported a -13.8% decline.