The Latest Case Shiller Report – What Does It Mean?

The latest Case-Shiller Index was published on Tuesday.  As always, Case-Shiller is published the last Tuesday of the month and reports on data 60 days in arrears.  So what does the latest index show and what does that mean for home value in metro Atlanta? 

Before we provide the answer, we want to make two caveats.  First, the Case-Shiller index of home values is very different from average sale prices which reflect the average prices of what is being sold in the market.  Right now, the heavy volumes in the market are on the lower end for 1st time home buyers and short sales/ foreclosures.  The luxury market is slower so that makes the average sales price lower than a normal market.  Second, real estate is local and every market is different.  Your local agent expert can help you understand the specific metrics in your local market. 

Now to the news….  The July index shows the 4th positive gain in a row for metro Atlanta home values.  If you look at the number, you will see the % gains every month are growing.  Click on the link below to see the details on the spreadsheet.

Case Shiller Index – Atlanta – July 2009 Index

 This means that home values have actually increased from March 2009 by 4.7%.  That is good news!  The peak of the index was July 2007 and the bottom of the index was March of 2009.  Since March, Trendgraphix reports pending sales increases for three months in a row with slight dips in July and August.  This is being driven by the expiring tax credits and the great buying opportunities in the market.   But remember….  home values are still down from their peaks and sellers must be realistic about pricing.  Home values are still down 19.35% from the peak of July 2007.  If you look at the average annual Case-Shiller index for each year, here is how homes purchased in recent years would compare to the current index: 

• Homes Bought in 2000 – Gain of 3.2%
• Homes Bought in 2001 – Loss of 2.02%
• Homes Bought in 2002 – Loss of 5.6%
• Homes Bought in 2003 – Loss of 8.54%
• Homes Bought in 2004 – Loss of 11.75%
• Homes Bought in 2005 – Loss of 16.05%
• Homes Bought in 2006 – Loss of 19.53%
• Homes Bought in 2007 – Loss of 20.05%
• Homes Bought in 2008 – Loss of 12.6 %

Homes values are essentially the same as the fall of 2000 right now.  Yes, we are slowly climbing our way out of this unprecedented housing crisis – but we are not there quite yet.  So where will home values go from here?  We believe that the “extended summer selling season” will continue through October Case-Shiller results.  We will start to see home values drop slightly in the late fall and winter months.  We expect next spring and summer to be better than the spring and summer markets of 2009.  If Congress sweetens the pot with a broader tax credit, we will see significantly more positive momentum in the market.  The keys to watch will be the following:

1. Extension and/or Expanding of Federal Housing Tax Credits
2. Mortgage Rates/ Credit Availability     
3. Pace of Short Sales/ Foreclosures Entering the Market

We will be posting a new article in the next few days that will address the growing trend of short sales.  This is going to be one of the significant trends to watch that will impact our home values.  Stay tuned….  

Tags: Atlanta foreclosures, Atlanta new homes, Atlanta real estate, Atlanta short sales, Case-Shiller Index Atlanta, Prudential Georgia Realty

This entry was posted on Thursday, October 1st, 2009 at 12:26 pm and is filed under Case-Shiller Index. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.