[Short term - Long term] housing prices
With all the attention focused on sharply declining home prices, I was curious about how prices appreciated and declined in one of the more overheated markets and while I'm not the biggest fan of the Case-Shiller index, on the slimmest of chances that their statisticians are just a little smarter than me :), let's look at their data for Phoenix.
The Case-Shiller index starts every housing market at 100.00 in January 2000 and you can see that home prices had appreciated by approximately 32% over the next 4 1/2 years which I think is pretty close to or slightly higher than historical price appreciation. But in the next 2 years, home prices appreciated at a pretty incredible rate of almost 72% peaking in May 2006. What started as a gradual decline has accelerated this year and prices have now declined by 32.6% in the past 2 years apparently wiping out all gains from December 2004 according to their price index.
It looks like they were "day trading" homes out there in the Valley of the Sun with a little too much short term thinking vs. long term thinking. After all, a house is a home.
Now I wish that Case-Shiller didn't just focus on the largest housing markets so that we can see what they have to say about Charleston real estate prices but certainly, we did not have the speculative fervor that Phoenix, Las Vegas and many cities in Florida had during the housing boom.