San Diego Housing Market News and Analysis
Case-Shiller Index: Cheaper Homes Still Rebounding Fastest
Submitted by Rich Toscano on March 6, 2014 - 2:00pm
The Case-Shiller home price index is not as timely as the monthly median price data, but has a couple advantages over the latter. First, because the CS index is calculated by comparing repeat sales of the same homes, it gives a more accurate read on actual home price changes (more than you ever wanted to know on this topic can be found here). Second, the Case-Shiller data additionally breaks down price changes for low-, mid-, and high-priced homes, which allows us to observe what prices are doing in each of those segments of the housing market.
So, we know that 2013's price surge was most beneficial to lower-priced homes, which were up 22 percent for the year. Mid-priced homes were up 19 percent and the most expensive tier was up "only" 16 percent. The overall index was up 18 percent for the year. (Note: the price tiers are calculated simply by separating the home sales into thirds: the high-priced tier is comprised of the most expensive one-third of homes sold during the measurement period, and so on.)
This is the same pattern we've seen since the 2009 home price trough: from their respective lows through the end of 2013, the cheapest one-third of homes were up 51 percent, versus 30 percent for the middle tier, 23 percent for the expensive one, and 34 percent for the overall index. (Some historical context for those changes is found below). Most of that price increase -- and in the case of the middle and high tiers, all of it -- has taken place since 2012.
This graph of the different tiers since the 2009 price low shows that the relative strength of the cheaper homes continued right through to the end of the year:
(continue reading at voiceofsandiego.org)
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|* Rich Toscano is a registered representative of and offers securities and investment advisory services through Girard Securities, Inc., a registered Broker/Dealer, Registered Investment Advisor, and member FINRA/SIPC. Pacific Capital Associates is not a subsidiary or affiliate of Girard Securities. The views and opinions expressed on this site are not those of Pacific Capital Associates or Girard Securities, Inc. The information on this site should not be construed as investment advice.|