Existing Home Sales are up 13.9% since Q1, 2009, according to Case-Shiller. Contrary to the recently released Report showing a 4.1% Quarterly Decline, Prices are going up. I do realize they are reporting on the most recent Quarter, but the majority of people who read the headlines might think that Real Estate Prices are declining. Who am I to question data put out by an Index that is used to trade Options and Futures on Wall St.? I am not questioning their data, just the context that they put it in, and the way it is spoon fed to Consumers. First of all, the three main problems I have with these type of reports are this:
1. The First Quarter Report (The one that just came out), is the same every year, negative. The reason being is that they no longer use “Seasonally Adjusted Figures” and there is of course a two month lag time. Since the Report for the First quarter of the year is through the end of March, one would have to assume that the Real Estate Market is the same when more than half of the country is under three feet of snow, as opposed to the middle of Summer, which it is not.
2. Including Data that is unique to only a small section, but representing it as indicative of the Broader Market. Remember in High School when the teacher would grade tests on a “Curve”. The teacher would throw out the Highest Scores and the Lowest Scores to get a “Fair Sample” of the class.
3. Not factoring in “Special, Non-Recurring Events” that skew the figures one way or the other, but treat them as normal data.

If you Google The Case-Shiller Report for the First Quarter from the last several years, the headlines all report a “Huge Decline” in Housing Prices. They also throw in a Month to Month Review that always shows a decline. It is accurate, but anyone that has been in the Real Estate Industry will tell you the same occurrence happens every year at the same time, in good times as well as bad. Back in the days when they did use “Seasonally Adjusted Figures”, there was a consistent .5% difference in the figures.

Including Detroit in the Index really skews the Data. I looked up Hud Homes in Detroit and there were several on the first three pages that were listed at less then $3000 (not a typo). So putting those figures in and representing them as being indicative of the National Housing Market is ridiculous. At the very least, it should really make you think what this report is trying to accomplish. What it definently is not, is an Accurate View of the National Housing Market. At best, it is a very broad snapshot from two months ago.

When the Press Release they send out shows massive Year over Year Losses,the one thing they left out was that there was the Home Buyers Credit last year. More Buyers in the Market meant an increase in prices, due to the Laws of Supply and Demand. If you look at their chart, it will show that when the Homebuyer Credit went into effect, Home Prices overall Nationally were at a 18.9% decline. With the Homebuyer Credit, it shot all the way up to plus 4%. Since the Credit expired, the National Real Estate Market has declined 9% to -5%. What that really means is, if you disregard the Price Increase from the Homebuyer Credit, Home Prices have INCREASED 13.9% since it’s Pre-Homebuyer Credit level of -18.9%! Regardless of what interpretation you decide to believe, the fact is that between the first Quarter of 2009, and the First Quarter of 2011, Housing Prices have INCREASED about 14%. That is even including those $3000 houses that they are selling in Detroit. It is not like the Homebuyers Credit just ended and the Market is going into a slide. The Home Buyer credit ended a Year Ago. Also keep in mind that The Case-Shiller Report only includes Existing Home Sales, not New Construction. New Home Sales Figures for April 2011: Sales up 7.3% over Previous Month, Prices up 4.3%.