The Power of Old Real Estate Information
Category : Laguna Beach Real Estate
If you’re a consistent reader of the OC Realtor newsletter you know I always make the point that you have to have the latest information before you make an opinion of the real estate market. Just look at the media frenzy over the ‘Double Dip’ in prices based on 3 to 4 month old information.
Here’s an article from a company that uses more up to date information:
Double Dip: Altos Says Prices Have Been Steadily Rising Since Then
While a number of closely-watched home price indices show that national readings have slipped into a double-dip, Altos Research says it’s come and gone.
According to the S&P/Case-Shiller index released earlier this week, national home prices dropped to a new recession low during the first quarter of this year as prices slipped another 4.2 percent.
Altos conducts its own analysis of price trends using active listing data to provide what the company says is more of a real-time view. The firm notes that the latest Case-Shiller findings are based on data only through the end of March. Since that time, Altos has recorded a steady uptick in prices for both major metros and mid-city markets across the country.
A separate study released this week by CoreLogic corroborates Altos’ assertion that prices have risen since the double-dip timestamp. CoreLogic says based on April sales activity, just after the Case-Shiller double-dip, it has recorded an increase in home prices nationally of 0.7 percent.
About three weeks ahead of the Case-Shiller announcement of a new cycle low, Clear Capital reported an official double-dip for its national home price gauge had hit, but in April rather than March.
Regardless of the disparities in the various home price indices, Altos says it expects to see a rising and falling pattern for several years. The firm’s VP Scott Sambucci believes the double dip is “really just the start of the next housing cycle.”
Altos has coined a colorful phrase to depict the ebb and flow of home prices – they call it the “Catfish Recovery.”
Sambucci laid it out by describing the catfish as a bottom dweller that moves slowly, feeding off the lake or river floor for a while, then heads up to the surface and back down, bobbing up and down without a distinct pattern or clear direction.
Altos says markets should plan for prices over the long term to hit a bottom, rise a bit, sink back down, rise again.
Sambucci says constant growth for home values is a myth. Charting housing cycles all the way back to 1890, he notes that the sharpest run-up by far occurred at the turn of the millennium, and the market is now in payback mode. In every other historical boom, Sambucci says the run-ups, all of which have been significantly smaller that the most recent, have always been given back.