Good end-of-year news as home prices show consistent improvement

Jason Wade

There’s a lot to be said for a little good news as we prepare to enter a new year. And we got a good dose of holiday cheer the day after Christmas, when the S&P/Case-Shiller Home Price Indices came out.

There are several things I look for when I’m trying to get a handle on economic data — especially statistics regarding real estate. Obviously, I look at the raw numbers themselves, but even more important is consistency of direction. A choppy sideways market — up one month and down the next — doesn’t tell me much. But an established trend can be useful, because it give us a better idea of where things are going. Finally, I like to see some geographic breadth. If properties in one or two areas seem to be catching fire (or going in the tank, for that matter), it may not reflect the broader market.

I was particularly glad to see the latest batch of Case-Shiller Index numbers — which cover October — because they contained good news by almost any measure:

  • The annual returns for Case-Shiller’s 10-city and 20-city indices showed healthy growth (3.4% and 4.3%, respectively). So I have to be pleased with the direction.
  • The trend looks good too, with the 12-month rate of change in home values rising 10 months in a row. That number has not only been positive, but improving steadily since December of last year.
  •  In 19 of the 20 cities, the annual returns were higher for October than they were for September. All but two of the 20 cities showed positive annual returns. (Chicago and New York were down.) Score one for geographic breadth.

Happy New Year!