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What is the Case-Shiller housing index, anyway? “The Case-Shiller index was created in the 1980s by the economists Karl Case and Robert Shiller. It was based upon data on repeat sales of single-family homes.” — NY Times Morning Brief. At some point, the index was taken over by Standard & Poor’s so it’s now known at the S&P Case-Shiller Index.

I’m not crazy about this housing index because it can’t measure anything in Flagstaff. It has to stick to big cities because it really is tracking resales of individual homes. Nonetheless, it gets the attention of Wall Street and is useful as a general gauge of what’s happening with housing nationally.

The bad news: This morning’s report shows that 2014 housing prices performed at their worst since 2011, when home prices were still fallingThe good news: Home prices grew in 2014 at twice the rate of inflation, making a home in most parts of the country a solid investment.

S&P’s own analysis is bleak:

The housing recovery is faltering. While prices and sales of existing homes are close to normal, construction and new home sales remain weak. Before the current business cycle, any time housing starts were at their current level of about one million at annual rates, the economy was in a recession,

says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. Press Release

More: Growth in U.S. Home Prices Downshifted in 2014 – WSJ.