One would think given the hotness of the real estate markets in many areas of the country, home prices would be going up. This is unfortunately not the case in almost all the cities tracked by the Case Shiller index.
The Standard & Poor’s/Case-Shiller index of 20 American cities fell 1.1% from November to December and 4% from December 2010. Eighteen out of the 20 cities tracked by the index posted declines and Atlanta, Las Vegas, Seattle and Tampa,Fla., each saw average home prices hit new lows.
Granted Case Shiller index is done with data two months old, but I can assure you that the inventory here in the Napa Valley is low and getting lower. As of this January there is only 4.5 months of inventory for all residential listings. Anything under 6 months is considered a seller’s market and with inventory being this low, prices should be going up. This is not the case either here with the average price for sold homes down 10% from December 2011 to January 2012.
The $64,000 question, when will things finally change. I am a bit more pessimistic than most and I know you are hearing many like Warren Buffet state differently. My opinion is not till next year we will distinctly see the bottom and home prices will rise. On the plus side, I predict when they do you will see an initial pop in prices and not a gradual increase. Between now and then, I don’t think prices will go down much more but go up and little one month and down a little the next.
If you are in market, or considering a near future home purchase, I would start sharping that pencil. If you find the perfect home, you should consider buying now and stop fretting about a possible small decrease in values. Remember why you are making this purchase, it your CASTLE , more than just the sum of the parts.
Below are two stories from this week’s C.A.R. Market Matters which details this exact point.
From The Wall Street Journal
Where are all the home sellers?
Inventories of homes listed for sale in January dropped by 6.6 percent from December to 1.77 million, the eighth straight month that listings have declined, according to data from Realtor.com.
From The Los Angeles Times
Home prices hit new lows
The Standard & Poor’s/Case Shiller index of 20 American cities fell 1.1 percent from November to December and 4 percent from December 2010.
Thank you for reading this post. If I can ever be of help in finding you the perfect property here in the Napa Valley, please email me at Curtis@NapaValleyAddress.com
Your Napa Valley Broker Extraordinaire, selling Real Estate here from its heart, Yountville
My website & blog: www.NapaValleyAddress.com