So once again, the news has reported that “Seattle home prices are down". “according to another index”. I was the kid in the class that would question everything. Sorry teachers, that was me. I had to ask the question, is that really true? The “index” that is being quoted is the Case-Shiller index. Seattle, in this index is hardly in context…
I am not a fan of the U.S. housing index created by Karl Case and Bob Shiller (in the early 1990s). That said, it is a highly watched gauge and worthy of commentary.
It is worthwhile discussing briefly exactly what is tracked and how it is put together. The indices are calculated from data on repeat sales of single-family homes; that is the sale of the same house over time (it therefore ignores the new construction market completely). The Case-Shiller index family includes 20 metropolitan area indices and two composite indices as aggregates of the metropolitan areas. These indices are three month moving averages and data is published with a two-month lag.
My biggest concern with the Case-Shiller report is really a local one. Since I am based in the greater Seattle area, which is one of the “cities” within the index. My issue is that Case-Shiller defines Seattle as the tri-county area – encompassing King, Snohomish, and Pierce Counties. In most people’s opinions, this is far too large a geography to have any real relevance. The markets in these three counties vary significantly from each other, so to define what is taking place in Seattle using sales activity in Tacoma and Everett seems ridiculous to me.
You can read the rest here.
While I do believe there are many a deal to be had in our present situation. The negative news does not put context into their reporting.
If you would like to discuss the local market and the possibilities for you and those you care about, call or email me.