No recovery here: Latest home price numbers problematic
Just call it the dead cat bounce.
That about sums up yesterday's report by the Massachusetts Association of Realtors that prices rose by half a percent, even as sales plunged 20 percent.
Thanks to beermeister, who called the dead cat bounce first.
And even that may be a statistical aberration - the latest report by the Case-Shiller index, the gold standard of home price tracking, has Boston area prices falling .2 percent.
The Case-Shiller index was up overall by .7 percent in April over May, but, significantly, Boston was one of seven cities that saw prices fall.
And even that overall, national bump, as modest as it is, appears questionable. The increase reported by Case-Shiller was the not-seasonally adjusted number. Seasonally adjusted, prices actually fell .1 percent.
Now the decision by Case-Shiller to highlight not-seasonally adjusted numbers seems odd given we are just coming off the spring selling season.
Still, a word of warning to conspiracy theorists. Before you start accusing the Case-Shiller of being in cahoots with the Realtor industrial complex, carefully read the post I just linked to. There are reasons, however flawed, why Case-Shiller highlighted the not-seasonally adjusted number in its press release.
After some obligatory happy talk about how the .7 percent, not-seasonally adjusted number is slightly encouraging, David Blitzer, chairman of the index committee, cuts to the chase.
"However, the seasonally adjusted numbers show that much of the improvement reflects the beginning of the Spring-Summer home buying season," Blitzer notes in the release.
Frankly, the more important number - and the one not highlighted by Case-Shiller in its press release - is the year over year price number.
And that is down 4 percent from April 2010 on the index's 20-City Composite.
But why stop now - I'm never one to shy way from beating a dead horse - or a dead cat, in this case.
There are two very obvious additional factors, beyond the seasonal issue, why home prices, both nationally and locally, might, in some measurements, appear to have posted modest gains.
First, we are in an artificial foreclosure lull. Banks have yet to get fully ramped up again with property seizures amid the ongoing fall-out over the robo-signing mess, and states across the country, including our own, have added all sorts of mandatory delays to slow the foreclosure process.
Second, the buying frenzy we saw last spring as the $8,000 home buyer tax credit expired tilted sales toward the lower end of the pricing scale.
James-in-cambridge actually explained it all rather nicely in one of his recent comments.
Last spring, a huge volume of lower-end houses sold due to the tax credit, boosting volume and dragging down the median price. Now that the credit's gone, when you compare this year to last year, the mix has returned to normal, so the median price has gone up while sales volume has gone down. No mystery there.
