Scrooged: October Case-Shiller Report - I'm glad Real Estate is local

By
Real Estate Agent with Steamboat Sotheby's International Realty

Skiing in Steamboat Springs is pretty good because of the snow making machines.

steamboat springs in the winter

If only there was some magic wand to wave over the housing market so things would start to pick up and stay up. The Case-Shiller October Home Price Index is not showing any news we can feel good about on a national level. The October report yields the following less than optimistic news:

  • 19 of 20 cities showed home price decreases versus September numbers
  • Versus October 2010, the 10 and 20 city composites posted annual returns of minus 3.0% and -3.4% respectively
  • Versus September 2011, the 10 and 20 city composites were down 1.1% and 1.2% respectively
  • Four markets (Atlanta, Cleveland, Detroit, Las Vegas) show prices below their January 2000 levels, while Atlanta and Las Vegas posted new lows in October
  • Both the 10 & 20 city composites are barely above their all-time lows and from their peaks, the 10 city composite is down 31.9%, and the 20 city composite is down 32.1%
Case-Shiller October Price Index from Steamboat HomesCase-Shiller October Price Index from Steamboat Homes

There is a caveat: real estate is local, and the Steamboat Springs market just posted some strong November numbers. Other areas where the local news is better include:

  • Detroit which while still below January 2000 levels, is up 2.5% over October 2010
  • Washington DC up 1.3% over October 2010
  • Phoenix which is up .3% vs. September 2011 (after 3 straight declining months) 

While the national numbers are bleak, there is rationale for the dismal report which at least helps us understand the dynamics in play:

  • there continues to be a weak labor market
  • high foreclosure rates in many areas are keeping home prices depressed
  • fall is typically a slow sales period for homes after the busier late spring and summer months
  • loan qualifications are rigorous and higher down payments are required by most banks
  • would-be buyers lack confidence that the housing market has bottomed out, so they are waiting it out

Given 2012 is literally just around the corner, and it’s an election year as well, there will be many economic trends and political maneuvers to watch as we turn the calendar page. While we may remain on the roller coaster for a while, it’s my hope that everyone stays on for the ride because there are great values to be found, and like the snow that’s inevitable in Steamboat Springs, Colorado, the market turn-around will happen, and not a moment too soon.

 

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Charlie Dresen

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