Standard & Poors released their 05/11 Case-Shiller Index this week. The index measures change in home prices from month-to-month, and year-to-year, in certain U.S. cities.
May’s Case-Shiller Index showed a 1% increase from 05/11. Home prices rose in 16 of the Case-Shiller Index’s 20 cities. The cities that did not see an increase, Detroit, Las Vegas and Tampa, saw a decrease in value while Phoenix was flat.
Don’t look too into into the numbers, though. Like the FHFA’s Home Price Index, the Case-Shiller Index is full of flaws.
The first such flaw of the Case-Shiller Index is its limited sampling space. Despite being billed as a national housing index, Case-Schiller Index gets its data from just 20 cities around the country. That is just 20 of more than 3,000 cities and towns nationwide.
The second flaw is that it only reviews the prices for single-family, detached homes in its findings. It does not consider Condominiums, multi-family homes, and new construction in the Case-Shiller Index.
In some markets, these excluded home types outnumber the included ones.
Furthermore, the Case-Shiller Index is flawed in that it is two months behind, taking a full 60 days to release.
The Case-Schiller Index reports on a housing market from 2 months ago — hardly helpful for today’s buyers and sellers in Louisiana, Alabama and Tennessee trying to make sense of today’s real estate market data.
When you want real-time housing market data, therefore, look past any National Index and talk to a real estate professional instead. It’s where you’ll get your best, most current and relevant information.
Contact me and I will happy to introduce you to one of the realtors I work with.
