In this morning’s Wall Street Journal, an interesting article talks about the timeliness of real estate data. We have been talking about this for years….
“We have repeatedly cautioned anyone to use real estate quarterly reports to get the best gauge of what is really happening in the markets right now,” says leonard Steinberg of Prudential Douglas Elliman, and leader of the LUXURYLOFT team. “We issue a monthly report that reports on SIGNED CONTRACTS as well as closed sales to get a more balanced perspective of what is selling for what RIGHT NOW. Closed sales often went to contract many months and sometimes even years before closing. Pricing is a reflection of what the market is will ing to bear to-day, not that of the past.”
When reading Tuesday’s report on home prices from the S&P/Case-Shiller index, use caution.
The Case-Shiller index uses data that is several months old—it’s a three month moving average, which means that Tuesday’s report shows home sales for April, May and June. That’s when the home buyer tax credits were largely still in effect.
So it’s not surprising that Tuesday’s reading showed that home sales gained by a non-seasonally adjusted 1% in the three month period ending in June from the period ending in May.
July’s weak sales figures—existing and new home sales were both at very low levels—means that sellers are going to be reducing prices if they want to sell homes. Real-estate agents across the country are describing a rare standoff in housing markets, where buyers and sellers aren’t seeing eye to eye on price.
So when you read of a ‘double dip recession’ chances are we are already in the dip and by the time the press reports it as actual, chances are we will be on the way out…