Sunday, June 5, 2011
Thursday, June 2, 2011
What Double-Dip?
I am seeing homes sell and prices moving up on the lower end. That is not a double dip! Are home prices still adjusting? You bet, and there are some really good deals out there. So drag out that check book and buy while you can.
It’s Thursday morning. Do you know where your home price index stood this week?
According to Case-Shiller’s famous monthly index for March (it’s actually an average of three months), the nation’s housing was double-dipping, with a 4.2% decline in the first quarter. Home prices in 18 cities of their 20 tracked dropped in March on a monthly basis; 12 hit new lows.
A day later CoreLogic’s release of its index for April (also a three months average) suggested: maybe not, or maybe not any more. Their home price index showed a 0.7% increase between March and April, the first increase in this index since the homebuyer tax credit expired in mid-2010.
What’s going on?
Both use a repeat sales method. Methodology-wise, not much difference unless you are a statistics junkie. Ok, there is a difference; Case-Shiller seasonally adjusts while CoreLogic does not. Nobody cares.
More importantly, the CoreLogic index is a little bit timelier covering three months ending in April versus Case-Shiller’s March number. So one could reflect winter’s discontent, while CoreLogic’s Index the green shoots of spring? OK, one swallow does not make it spring. But for every spring there is a first one.
In this context, it is interesting that CoreLogic produces another index. It excludes distressed sales from the equation, which makes this index just a little bit more interesting. Distressed sales are REO sales, short sales etc. Note:
- Year-over-year U.S/ home prices including distress were down 7.5% in April. Without distress, CoreLogic’s index for the nation was up 0.5%!
- Closer to home, for single-family homes and including distress the 12-months changes were -5.7% in Los Angeles; -3.77% in Orange County; and -4.34% in San Diego County. Double-dippy.
- Excluding distress, 12-moths changes registered +2.75% in Los Angeles County, -1.57% in Orange County, and 1.15% in San Diego County. OK, it’s not be quite spring time for Orange County, yet.
Clearly, the CoreLogic numbers show an interesting delineation. They may reflect the difference in quality of foreclosed homes versus non-distressed homes. They also could suggest that the fabled “turn” in the housing market may arrive first in the regular, non-distressed housing markets.
