The video discusses the data released March 2014 for the Case-Shiller Home Price Index for Phoenix AZ.
Phoenix home price index falls for first time in 2.3 years
The overall Case-Shiller Home Price Index for metro Phoenix fell slightly (one-half of one percent) in the two month from November 2013 to January 2014. It was the first time the index fell for two consecutive months since September 2011.
The Low Price Tier, however, fell 1% from December 2013 to January 2014.
The Low Price Tier was hardest hit by the real estate bust but it also increased the most during the real estate rebound the last two years with the Phoenix Low Price Tier index increasing 87% from August 2011 to November 2013.
The Case-Shiller Index had shown slowing, yet positive, home price appreciation for metro Phoenix throughout the fall until December when the Index fell slightly. The trend continued into January 2014.
Seasonal Bump or Long-Term Trend?
The Case-Shiller Home Price Index is sort of the benchmark for home prices because it measures appreciation and depreciation directly. It’s less prone to being influenced by changes in the mix of homes being sold. I’m starting to wonder if recent increases in luxury home prices may have masked a slight decline in the rest of the market when looking at average home prices.
We won’t know for sure for a couple of months or more whether the slight price declines in December and January were a seasonal thing – that’s typically the weakest part of the year for home prices – or whether it was the beginning of a longer term price trend.
I think it’s the former. Without a strong upward or downward trend, seasonal trends will become more noticeable in Phoenix home prices. Over the last decade, strong downward and upward price trends tended to overpower seasonal trends. Anyway, that’s my thinking this morning.
Phoenix AZ Case-Shiller Home Price Index
Phoenix Home Price Tier Breakpoints for January 2014
• Low Tier – Up to $168,477
• Middle Tier – $168,477 – $271,945
• High Tier – $271,945 and up
Phoenix Home Price Appreciation – August 2011 to November 2013
Overall Prices = Up 44%
• Low Price Tier = Up 87%
• Middle Price Tier = Up 53%
• High Price Tier = Up 33%
The Case-Shiller Home Price Index (press release) is the best estimate of actual home price appreciation (or depreciation). The downside to the Case-Shiller Index, however, is that it runs a little old.
Call me, John Wake of HomeSmart, at (480) 600-0947 for more metro Phoenix real estate market information.
Inflation-Adjusted Case-Shiller Home Price Index for Phoenix AZ – January 2014
Overall Prices = 104% of January 2000 index
• Low Price Tier = 97% of January 2000 index
• Middle Price Tier = 101% of January 2000 index
• High Price Tier = 108% of January 2000 index
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Be aware that there are complications when in applying an index (Consumer Price Index) to an index (Case-Shiller Home Price Index) but, nevertheless, the results are revealing.