I like to think I know everything about home prices, but I learned a few things from Prof. Chip Case at a conference yesterday (one of the men behind the Case-Shiller Home Price Index)....Has she never seen any graphs of home prices or looked at the publicly-available S&P/Case-Shiller spreadsheets? Housing is still way overvalued. We are still much closer to the top than we are to the bottom. In fact, I'm willing to bet that most people predicting that the bottom is right around the corner don't realize how high prices have risen.
Prof. Case showed me a chart of home prices for the top twenty markets in the country—all the numbers I’m used to reporting, but one column I hadn’t seen. The first column was percentage price drops from the peak in 2005-6, the –28 in Las Vegas, the –26 in San Diego, the –25 in Miami.
But the new column was percentage price increases from March of 2000 to March of 2008. Every single market was in the positive, except Detroit, which has its own, non-housing bubble issues. Miami prices are still up 109 percent from 2000. Los Angeles home prices are still up 107 percent from 2000.
Saturday, June 21, 2008
How Can a Reporter Who Covers the Housing Market Not Know This?
I usually like CNBC reporter Diana Olick's coverage of the housing market, but today I am stunned at her ignorance of one of the most obvious aspects of the housing bubble: