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Market News and Trends

Austin and Case-Shiller – How Do We Compare?


I haven’t commented in quite a while on S&P’s Case Shiller Index of home prices, but news this week makes that appropriate:

Home prices hit nearly 2-year peak (WSJ Market Watch)

U.S. home prices nationwide rise at faster pace in August (Washington Post)

This is great news!  Not only have all Americans been eager to see a true economic recovery take hold, but most analysts know that a robust U.S. economy depends on a strong housing sector.  As I have pointed out many times, the long-term strength of the Austin/Central Texas real estate market relies on a healthy larger economic environment.  Good news all around!

As always, though, I feel the need to provide some perspective.  In the chart below you can clearly see that peak almost two years ago in the 10-city and 20-city Case Shiller indices, and the recovery in recent years (click to enlarge):

The enormous price bubble that led to the recent crisis is also quite visible.  I added Washington, D.C. to this chart because it was the first of the Case Shiller cities that began climbing up from the market bottom in 2009.  I added color-matched lines to the chart to help compare the August index levels with the past, and you can see that with the growth in recent months, home prices as measured by Case Shiller are back to where they were in mid-2003 to mid-2004.

The blue lines (dotted and solid) track average sale prices in the Austin area.  I did not add any color-matched lines there because our prices never really fell significantly during the crisis we all read and heard so much about in recent years.  The 12-month average of home prices dipped about 4% in 2009-2010, but it has been above its August 2008 peak for 11 out of the previous 25 months.  (Now 12 of 26 months, counting September 2012.)  Clearly, our market prices never came anywhere close to the previous mid-decade levels.

Looking at year-to-year changes in home prices is also helpful in this comparison:

I love roller coasters — recreationally.  But the ride the Case Shiller cities experienced over the past few years is nobody’s idea of a good time.  I am genuinely encouraged by the trend shown by the Case Shiller indices and I hope and believe that the recovery will gain real traction this time.  It’s time all Americans got some good news financially.

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About Bill Morris, Realtor

More than thirty years of business experience (high tech, client service, business organization and start-up, including many years in real estate) tell me that service is the key to success and I look forward to serving you. I represent both buyers and sellers throughout the Austin metropolitan area, which means first-hand market knowledge is brought to bear on serving your needs: -- Seller Representation is a comprehensive process that begins with thorough market analysis and consultation, continues with properly staging the home to achieve the highest price possible in a reasonable time on market, a complete program of marketing and promotion, ongoing updates and communication, closing coordination, and follow-up throughout (and after) the sale. -- Buyer Representation is also full service: shopping, previewing, price and market consultation, contracting, negotiating, coordination of inspections, appraisals, repairs, and closing details, and follow-up beyond the closing of your purchase to ensure your lasting satisfaction. Because the real estate industry is becoming more sophisticated and challenging every day, you need a professional that understands the industry and is positioned to stay ahead of the game. I go the extra mile to help you achieve your goals. That's why I constantly research the market and property values so your home is priced effectively from day one. I also make sure the public knows your home is for sale by using innovative advertising and marketing techniques to attract potential buyers.

Discussion

2 thoughts on “Austin and Case-Shiller – How Do We Compare?

  1. As always, great stuff.

    MS

    [cid:image002.png@01CCC6D9.EE1C80B0]
    Office: 512/454-4500 ∙ Mobile: 512/563-4764 ∙ Fax: 512/454-4559
    Mark Sprague, State Director of Information Capital for Independence Title, is a respected analyst of the real estate and financial industries, and the Austin market in particular. For specific questions about market issues, contact Mark at msprague@independencetitle.com
    CONFIDENTIALITY NOTICE: This email transmission is covered by the Electronic Communications Privacy Act, 18 U.S.C. 2510 et seq., and the information contained in this message and documents accompanying same are legally privileged and confidential information intended only for the use of the individual or entity named above. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copy of this message is strictly prohibited. If you received this message in error, please immediately notify us by telephone and purge all copies of this message from your system. Thank you.

    Posted by Mark Sprague | October 31, 2012, 1:44 PM

Trackbacks/Pingbacks

  1. Pingback: Austin Market Dashboard – updated through October 2012 « Bill Morris on Austin Real Estate - November 27, 2012

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