The Housing Market: Which Price Estimates Are Right?

One of the most profound concerns about housing data should have its roots in when measurements were taken. New Case-Shiller data points to a home price recovery of 10.9% in the 20 largest markets. But the information on which is its based is almost three months old.

Corelogic’s more recent statement about real estate prices is more pessimistic than most:

While the data point to continuing price appreciation, the overall national rate of home price increases in 2013 is projected to decelerate from 2012 levels.

This assessment was issued in May. Perhaps, Case-Shiller data for March was right. However, Corelogic appears to be forecasting that it will not be right for long.

One theory is that home price trends should be based on foreclosure trends. The lead research firm on this matter is RealtyTrac. Its mid-May foreclosure market report showed:

Nationwide single family building permits increased 27 percent from a year ago in the first quarter to the highest first-quarter total since 2008. Meanwhile U.S. foreclosure starts in the first quarter decreased 27 percent from a year ago to the lowest quarterly level since the second quarter of 2006.

However, to confuse its position, in another report, Realtytrac said of vacant homes:

As of the first quarter of 2013, there are just over 133 million housing units in America and 10.7 percent of them — more than 14. 2 million — are vacant all year round for some reason or another, according to the Census Bureau.

In an analysis of of another trend, Realtytrac added:

Nearly 11 percent of houses in America are empty, making them a potential haven for criminals, as well as an eyesore for neighbors and a disaster for local governments, which are losing their much-needed property tax base. Vacancies have also lowered property values of surrounding properties in many communities.

So, property values may turn from a general trend upward, according to Realtytract, to one that is less robust, or even worrying.

Another piece of bad news came from the Commerce Department. Housing starts dropped by 15.6% in April. In the same report, the department also said building permits rose 14.3% from March. Set alongside data from other reports, March is not April, which is not May. Either some portion of the information from the sources is wrong, or the housing market has gone through wild, schizophrenic changes recently.

Either housing is getting better or it is getting worse.