|
For months now, housing skeptics have told us that recent signs of stabilization in home prices—as seen in, for instance, a flattening in the Case-Shiller home price index for most of this year—is a result of mere “seasonality” rather than any real strength in the market. Prices tend to go up during the spring versus the winter, as the weather warms up, and then rise some more during the summer as families move while the kids are out of school. Take out that seasonal influence, the bears say, and home prices are still headed down, down, down.
Or not. The release of the July Case-Shiller numbers, out this morning, makes a bit of a hash of the bears’ argument. From 2000 through 2008, the change in the month-on-month change in the index (that is, the second-derivative of monthly change) has averaged minus-19 bps from June to July, and was only up once, in 2003. Which is to say, sequential monthly improvement in the index usually deteriorates seasonally in July. This month, though, the change in the rate of change rose by 18 bps. So instead of a seasonally monthly slowing, we’re seeing month-on-month acceleration.
|
Case-Shiller
Home Price Index
20-City Composite
July M/M Change-June M/M Change
(basis points)
2000-2009
(not seasonally adjusted) |
|
2000 |
-54 |
|
2001 |
-13 |
|
2002 |
-12 |
|
2003 |
18 |
|
2004 |
-41 |
|
2005 |
-19 |
|
2006 |
-18 |
|
2007 |
-2 |
|
2008 |
-35 |
|
Average |
-19 |
|
|
|
|
2009 |
18 |
|
Source: Standard & Poor's |
As far as that goes, the seasonally adjusted version of the index shows that prices do indeed seem to be stabilizing:
The evidence is growing that the long slide in home prices is at last coming to an end. For months, skeptics have dismissed recent price strength as merely the product of the calendar. Now, it seems, they’ll have to dismiss it all some other way.
What do you think? Let me know! |