We just learned that Case-Shiller home prices were up 0.75% month-over-month in December, and up 13.42% on the year in December.
But this is much better than the median data from the National Association of Realtors (NAR), points out Ian Shepherdson at Pantheon Macroeconomics.
“This seems to be a reflection of the failure of the Case-Shiller data to properly account for the impact of the declining proportion of foreclosure sales last year,” according to Shepherdson. “Distressed property sells for lower prices than non-distressed homes, other things equal, so the fall in foreclosure sales as a proportion of all transactions boosts reported prices.”
Shepherdson expects that we will see this in the Spring data where month-over-month data will be “much lower” and there will be a “sharp drop” in the year-over-year rate.