Vashon Island Housing Market News: Fresh Economic Analysis
January 1, 2009 at 5:17 am Leave a comment
The National Association of Realtors released its analysis of Standard&Poor’s Case-Shiller Index of home prices on December 30, which is an index of 20 major U.S. cities and shows an 18% drop nationally from October 2007 to October 2008. As we have noted in previous articles here, the national figures do not accurately reflect the micro-home markets which are critical to an analysis of local home sales. The strengths of Seattle’s housing market relative to the national market have been discussed in other articles here. However, the S&P figures are useful; as general indices of trends.
The corresponding NAR Existing Home Sales (EHS) report issued last month showed a yearly decline of 11.3 percent over the same October time period. It is important to note that the Case-Shiller Index coverage of 20 major U.S. cities is somewhat biased toward markets that have suffered the most in this economic crisis, while the NAR index is a true national survey. Further, Case-Shiller weights higher-priced homes which tends to skew their results. The NAR index covers all sectors of the market. Readers should be aware of the biases of the indices before basing investment decisions on the reports. The two indices are useful to the extent that they specifically identify the price sector in which an interested buyer or seller may be interested.
By way of a caveat emptor, Case-Shiller reports a monthly drop in prices between September and October of -2.2 percent; the corresponding NAR number was -4.2 percent. However, both numbers are relatively meaningless—changes in market mix, yearly purchasing patterns, and index timing render monthly comparisons of very limited accuracy in terms of reporting actual experience or predicting future trends.
Finally, as food for thought, the NAR report forecasts that Gross Domestic Product in the fourth quarter of 2008 will be down -5.8%, and that 2009 will begin the first quarter with a GDP decline of -2.0%. The NAR forecasts that the unemployment rate by mid-2009 will be 8.2%. The NAR predicts that the average 30-year fixed mortgage rate by mid-2009 will be 5.2%.
Statistical information is subject to the copyright of the National Association of REALTORS®, and reprinted with permission. Analysis is provided by Go Real Estate.
The National Association of Realtors released its analysis of Standard&Poor’s Case-Shiller Index of home prices on December 30, which is an index of 20 major U.S. cities and shows an 18% drop nationally from October 2007 to October 2008. As we have noted in previous articles here, the national figures do not accurately reflect the micro-home markets which are critical to an analysis of local home sales. The strengths of Seattle’s housing market relative to the national market have been discussed in other articles here. However, the S&P figures are useful; as general indices of trends.Entry filed under: • Real Estate, Housing Market News, Real Estate Statistics. Tags: Seattle Case-Shiller index, Seattle National Association of Realtors, Seattle real estate news, Vashon island Case-Shiller index, Vashon Island National Association of Realtors, Vashon Island real estate news.
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