Thoughts on Case-Shiller and the housing double dip
To nobody's surprise (OK, I guess some economists were surprised but that's their job after all), Case-Shiller reported that home prices declined in October and are forecasting a double dip.
“The double-dip is almost here,” David Blitzer, chairman of the index committee at Standard & Poor’s, said in a statement. “There is no good news in October’s report. Home prices across the country continue to fall. The trends we have seen over the past few months have not changed. The tax incentives are over and the national economy remained lackluster in October, the month covered by these data. Existing homes sales and housing starts have been reported for both October and November, and neither is giving any sense of optimism.”
On the other hand, prices improved in the Washington DC area, one of the few places in the country where housing remains strong. According to the Washington Post:
“A healthy job market, particularly for high-salaried workers, buoyed demand and prices for housing in the D.C. area, local economists said. Home values climbed 3.7 percent in Washington in October from a year earlier, making it one of only four regions nationally to avoid a dip in prices, the Standard & Poor's Case-Shiller home-price index said.”
While Charleston is not exactly like Washington DC (and with the growth of government, very few places are), the Charleston real estate market remains stronger than most because of a reasonably good economy, job creation and job growth and a corresponding increase in population improving demand. The negative in the Charleston housing market is quite simply too much inventory which is pressuring prices but not to the degree that other markets face.
And to repeat what I have written about Case-Shiller on several occasions, the housing markets that are measured by the index are heavily weighted toward many of the most distressed markets.
Bill at Calculated Risk creates some of the best charts anywhere and here is an overlay of Case-Shiller and CoreLogic HPI in real terms (adjusted for inflation using CPI less shelter).
