S&P/Case Shiller – Home Prices Climb
The S&P Case Shiller composite index of 20 metropolitan areas was released this morning. This is probably the most respected report in the industry but it does trail most of the other housing industry tracking reports.
Today’s report showed that for December U.S. single-family home prices not only improved, but, showed the biggest yearly gain in more than six years! Home prices in the 20 cities jumped 6.8 percent year-over-year!
Now before you break out the champagne, there was an interesting interview in the Wall Street Journal today with Mr. Shiller. Perhaps, the most insightful comment, Mr. Shiller had in this interview, and one that we should all heed was:
“The trend in home prices seems to be up now. It has been going up. That’s upward momentum, which by my general rule of forecasting has been good for the future. I’ve been tentative about that. It may well be the turning point.
But I’m not sure about that. I’m more worried than most people that it could be a short-lived turnaround. It could be like the 2009-10 upturn where we saw home prices rising right after President Obama took office and right after the home-buyer tax credit was instituted. In that upturn there were some cities that did quite spectacularly. And then that fizzled. I’m not too sure that this one will extrapolate either.”
