A report published Tuesday March 31, 2009 showed that home values fell nearly 3 percent in January 2009 versus the month prior and by 19 percent from last year.
On the surface, data from the study looks like more bad news for housing. With deeper inspection, though, we uncover reasons to discount the report’s finding.
For one, the report includes home price data from just 20 cities around the country — and they’re not the 20 most populated cities, either.
For example, data from #4-ranked Houston is not included and neither is #7 San Antonio nor #10 San Jose. #54 Tampa, however, is included.
Secondly, the report is two months lagging.
Published March 31, its data is only accurate as of January and a lot has happened in the last 2 months. This includes a record-drop in interest rates and the introduction of an $8,000 tax credit for qualified first-time home buyers. The stimulus has helped raise home sales volume on both new homes and previously-owned ones.
And lastly, one more reason to question the relevance of the Case-Shiller report is that a government study on the same topic showed home values rising over the same period, not falling. According to the Federal Housing Finance Agency, home values grew 1.7 percent from December 2008 to January 2009.
In the end, home values are a local phenomenon that can’t be summarized as a national “summary”. National data can be helpful for watching longer-term trends, but it shouldn’t be used to make a “Buy or Not Buy” decision.
For that, talk with a real estate professional with access to local data instead.
List of United States cities by population
(Image source: LA Times)