Home sales prices have been one of the most watched economic indicators during the Great Recession. So when a new set of numbers came out today, reporters nationwide jumped on the data. Changing Gears noticed a little line in the press release that read “Atlanta, Cleveland, Dallas, Detroit, Phoenix, Portland (OR) and Washington D.C. saw improvements in their annual rates of return in February versus January; New York was unchanged.”
Improved? In Cleveland and Detroit? Really?
After reading headlines all day about how Cleveland prices are still below what they were in 2000, and Detroit is as much as 30 percent below 2000 home sale prices, this one little word – improved – prompted us to call Standard & Poor’s ourselves. We’re glad we did.
David Blitzer, Chairman of the Index Committee at S&P said all that means is that between February of 2011 and February of 2010, things improved more than they did between January of this year compared to January of last year. Overall, he said, things are still only inching up.
Blitzer said it’s hard to get a clear picture of what a normal year would look like, let alone how much we might be improving. He said it looks like home prices “have been creeping up a little bit” but not advancing strongly.
“I don’t think the news is predominantly good at all,” he said. “And if you dig in you’ll find more negatives than positives.
Blitzer said if there is any good news in the latest home sales prices, it’s that things “could be a whole lot worse.”
Starting in 2003, home sales prices shot up until around 2006, only to come crashing back down in the spring of 2009. Since then, prices have been bouncing around. Some things, like the New Home Buyers Tax Credit have caused slight increases, while at other times the prices have dipped. Blitzer said it’s also important to keep in mind that different cities hit their bottom at different times. Most cities bottomed out around the spring of 2009, but Detroit hit its lowest home prices this past January.
I figured as long as I had him on the phone, I could ask him a whole host of other questions, like why we use 2000 as the year to compare home sale prices to and if this means it’s a good time to buy a house. You can find out the answers to those questions, and listen to the full interview below.