Case Shiller Is Too Slow – Here’s The Real (E)state Of The US Housing Market Right Now

The mainstream reported the Case Shiller Index for “May.” I put that in quotes because the data does not represent the actual state of the market in May.

Case Shiller represents the 3 month average price of repeat sales (not all sales, just houses that had sold previously) which were recorded by county agencies in March, April, and May. It is now the end of July.

Since real estate closings typically 30-90 days after the contract is signed, the current Case Shiller Index represents average market values of repeat sales (not all sales) in February, March, and April. So in spite of the fact that the headlines said May, in reality the index represents a smoothed version of the average state of the market for February through April, not May.

The question is why anybody cares about that number now, at the end of July. Do we report the Dow's average price in March now? The media makes a big deal here over old news which by now could be completely wrong.

We need to know where the market is now, not where it was in February or March. I assure you, your local real estate agents know the current state of the market even if Bloomberg, The Wall Street Journal, and Robert Shiller and Carl Case don't. Corelogic, which now owns the Case Shiller Index, has access to current contract values. Why aren't they aggregating and reporting that instead of data that is old, stale, and useless? In fact, Corelogic does that as a minor, incomplete, single graphic in its monthly market updates. Nobody pays attention to that.

Yes, data is available on the current state of the market. The Realtors' MLS has current contracts in its database, but they don't bother to report it publicly. Fortunately, online broker Redfin does. They post the information around the middle of each month for the preceding month. In mid July, they posted median contract values for the 55 largest US metros in June.

Redfin reported that June contract prices rose 5.1% year to year to $285,200. The month to month increase was 1.6%, a sign of radical acceleration in housing inflation, but one month does not a trend make.

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