The S&P/Case-Shiller Home Price Index was released last week, revealing a reduced decline of annual data in the composite 10 and composite 20 indices. The Washington DC metro area index showed a slight decrease of home process from December 2009 through January 2010; although showed an increase of 3.5% compared to the same time a year ago.
The index compiles and tracks home price data in twenty metro regions across the country. The data has been the “gold standard” of home price indicators for many years. However, the index revealed last fall and winter the emerging trend- the two tier market. Does the existing peak to valley ratio of the index indicate an ongoing trend of the two tier market, having distressed properties selling for much less than owner re-sales? Or is it an indicator that price differences between distressed properties and owner re-sales are becoming less significant?
As the spring market is gearing up, many home owners are preparing to list (or re-list) their homes for sale hoping for a chance to get top dollar; many home owners have decided to wait until conditions are better for them. However, those selling have most likely come to terms with the fact that home prices are on average equivalent to 2004/2003 home prices. Many are eager to see if last August’s “bump” in the S&P/Case-Shiller Home Price Index was aberrant due to a slumped market or a trend of the bifurcated market.
By Dan Krell
Copyright © 2010
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