A look inside today's Case-Shiller index
The "eagerly" awaited Case-Shiller index was released today and to nobody's surprise, "record" sharp declines in housing prices were reported. But a closer look inside the numbers reveals why.
Look at the top of the list and you'll see Phoenix, Las Vegas and the major cities in California and Florida. Despite declines in the past year ranging from over 30% in Phoenix to only 18% in Tampa, each market continues to show home prices up anywhere from 44% to 89% (note the circled area) since 2000. (The Case-Shiller index has a base value of 100 in January 2000 so a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the metro market.) Chart courtesy of WSJ.
Locations closer to Charleston including Charlotte and Atlanta (see arrows) have more moderate price appreciation since 2000 and a correspondingly much smaller price decline similar to how statistics show home prices in the Charleston real estate market have performed.
I've said it before, in fact I've said it most every month, but Case-Shiller distorts what is really going on in the housing industry because it is so heavily weighted toward the most distressed housing markets in the country. And headline after headline, month after month is making people uneasy to say the least and fearful might be a better word to describe the anxiety being felt in America today due to declining home prices.
And if you didn't live there, it wouldn't matter.
Except. Now the government has stepped in by putting taxpayer money at risk from across the country into solving the housing and mortgage problems of a few high profile markets and banks and have seemed to made a bigger mess than existed previously.