90% of Case-Shiller Markets Improve in April

The Case-Shiller Index was released yesterday.  It is an index tracking monthly home valuations from select cities and is among the private sector’s most popular home pricing models.

The Index and analysis show that the housing market is gathering momentum.

In the index’s 20 tracked cities:

• 90% improved month-over-month, albeit marginally
• 4% increase in home values year over year
• The two losers in this month’s report, Miami and New York, dipped are off just 0.5% and 1.0% year over year

Perhaps the biggest sign of strength:  San Diego.   San Diego has now shown price improvements monthly for 12 straight months.

I like Case-Shiller for its ability to show general trends.  It has some major flaws.

For starters, it is on a two-month delay.   The market has definitely been improving for the past year.  What we want to see is the May and June data from after the home buyer tax credit surge.

As a Chicago mortgage lender, I don’t mind the cities on Case-Shiller’s list, but it is only 20 cities.  It does nothing to help forecast the price of your lake home in southwest Michigan.  Even within Chicago’s figures, market conditions can be radically different from neighborhood to neighborhood.

It has flaws, but like the government’s Home Price Index, Case-Shiller identifies broader trends in housing that consequently shape government and policy decisions.