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S&P/Case Shiller: Seasons Don’t Exist In Housing Market?

August 30, 2011  |  by Jonathan Miller

The S&P/Case Shiller Home Price Index was released today reflecting the average of April-May-June closings which likely went to contract as early as January-February-March when the housing market began to wake up after a post-tax credit slumber in the second half of 2010.  While there are 20 cities in the index, the chart above contains some of the cities I follow closely.

The RBI Home Sale Price Index reports that contained the same period of time analyzed in Case Shiller was released way back on March 10, 2011, covering the market results of nearly 6 months ago for DC Metro and Baltimore Metro.

Here’s a quick recap of today’s S&P/Case Shiller report results if you feel its helpful to understand what happened in the early months of 2011:

20-City Composite (non-seasonally adjusted) +1.1% Month over Month, -4.5% Year over Year, -31.6% from Peak

DC (*See chart below for list of areas included) +2.3% Month over Month, -1.2% Year over Year, -26.9% from Peak

Of all 20 cities tracked, the DC area saw the smallest year over year decline.  Remember that this index is based on closed prices, lagging as much as 6 months after the contract is signed.  So what the report is really telling us is that the prices in early 2011 were 1.2% less than prices were in early 2010, during the heated run-up of the federal homebuyers tax credit.

I’m not sure why I am always splitting hairs about seasonality, since there basically are no housing seasons in the S&P/Case Shiller Index as evidenced by the chart below:


I matched up the DC and 20-City Index by seasonal and non-seasonal results.  The conclusion?  There is no spring housing market, no summer housing market, no fall housing market and no winter housing market.  Apparently it’s all the same all year.  Seasons don’t apply to housing market patterns.  Really?

My conclusion about the monthly CS report?  It’s what I’ve said before:

Market information that misinforms by being late or out of context does everyone a disservice because so many make important life-decisions with it.


Posted in Blog, Jonathan Miller Insights

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