If you look at one newspaper, journal, business review, or whatever your written media of choice is, you may read that the economy is thriving, barreling full steam ahead, and bound for glory. The next item you pick up, on the very same day even, may provide an analysis that states that we’re in a free fall, the world is doomed, and all hope for economic recovery is lost. Oh, the mixed signals we get from the abundance of available information! It’s up, it’s down, we know, we don’t know, it’s certain, it’s uncertain. And of course, this isn’t just limited to broad economic data or U.S. specific trends. Rather, the inconsistency and mixed signals are extremely prevalent when it comes to the publication of real estate market data as well.
Frankly, it can be incredibly difficult to try to decipher it all. At least some organizations and publications take the time to conduct well-planned studies, employing comprehensive research methods, and organizing the results with concrete statistics, graphs, and tables. Surely there is some injection of opinion in the presentation of the analysis and data, but there is usually solid methodology and numerical information that supports the assertions, and generally makes it easier to understand and digest it all.
One financial report we tend to rely on is the S&P/Case Shiller Indices, which are widely considered the leading measures of residential real estate prices in the United States. According to its most recent data, year-over-year home prices are still rising, although the growth was slower than it had been in the previous fourteen months. Specifically, “the 10-City Composite Index rose 9.4% year-over-year while the 20-City measure climbed 9.3%.” These numbers are down from the previous month, when they were 10.9% and 10.8%, respectively, and the numbers reflect the slowest rate since February of 2013. Again, this does not mean that prices are no longer rising; it simply means that they are rising at a slower pace. This is actually pretty good news in many ways because it is an indication the we are returning to a more “normal” housing market.
As for other economic indicators, there is some level of consistency regarding employment, with the general consensus revealing an improved job market. In general, a healthier job market coincides with a better real estate market, so the apparent return to normalcy for both bodes well for the U.S. economy.