Market Direction:
Rates are: MOVING LOWER
Rate Volatility: HIGH

Interest Rate Trends:
Long Term (4-6 weeks): UP
Short Term (1-2 weeks): UP

S&P/CASE-SHILLER: HOME PRICES DOWN 15.3% IN MAY… OR ARE THEY???…

I get so tired watching how the media plays with numbers. If you saw any of the news today, you’ll recall that the S&P/Case-Shiller Index for July (which goes through the end of May) showed a 15.3% drop in prices for May for their 20-city MSA composite year-over-year index. Of course, you probably didn’t hear any mention of the fact that it was year-over-year, OR that it’s a “national” price indicator based on averaging the top 20 MSA’s (metropolitan statistical areas), most of which had HUGE unsustainable rates of appreciation in the last few years.

I can play with numbers too… let me give you an example: Take the S&P/Case-Shiller numbers from the beginning of this year (Jan 1st, 2008) and contrast them with our local numbers here in Taos County. To keep it as equitable as possible, we’ll restrict our numbers to the same data set as they do: existing home resales (SFR - no condo, land, etc). So what do we find?

January 1st through May 31st shows a 7% decline “nationwide” based on the Case-Shiller data set, whereas here in Taos County we show a 1.87% INCREASE in home values (over a 5 month period). This should reinforce the fact that real estate is LOCAL in nature, not national.

I’ll end by saying this: although a 1.87% increase over 5 months may not seem terribly exciting, remember that many places saw a 7% decline for the same period… We have had easily sustainable rates of appreciation for the past few years. There’s no reason to expect a large correction to our local housing market. Slow and steady wins the race