Sun State Savings

Stan­dard & Poors released its Case-Shiller Index Tues­day. On a seasonally-adjusted basis, between April and May 2010, home prices rose in 19 of Case-Shiller’s 20 tracked mar­kets.  It’s the sec­ond straight month of strong Case-Shiller findings.

Also, May’s num­bers are a mirror-image of February’s. In Feb­ru­ary, 19 of 20 mar­kets lost value.

In its press release, the Case-Shiller staff resisted call­ing May’s data proof of a hous­ing recov­ery, not­ing that home val­ues remain flat as com­pared to Octo­ber of last year. How­ever, there are some note­wor­thy num­bers in the Case-Shiller report.

1. 13 of the 20 tracked cities are show­ing home price improve­ment year-over-year
2. Fore­clo­sure poster­ch­lld San Diego has now shown 13 straight months of improvement
3. San Diego, San Fran­cisco and Min­neapo­lis are show­ing double-digit annual growth

These are all good signs for the hous­ing mar­ket, but the Case-Shiller Index is not with­out its flaws. Most notably, the data is lim­ited to just 20 cities nation­wide — and they’re not even the 20 largest ones. 

Cities like Hous­ton, Philadel­phia, and San Jose are excluded from Case-Shiller, while cities like Tampa (#54) are not.

Another Case-Shiller flaw is that it reports on a 2-month delay.

There­fore, today is sev­eral days from the start of August but we’re now reflect­ing on data from May. Given the speed at which the real estate mar­ket can change, May’s data is almost ancient.  Today’s val­ues may be higher or lower than what Case-Shiller reports.

For home buy­ers, reports like the Case-Shiller Index may not be use­ful in mak­ing a “Buy or Not Buy” deci­sion, but can aid in watch­ing longer-term trends in hous­ing.  For real-time data, talk to a real estate agent with access to local fig­ures instead.