sceptics of the May Case-Shiller numbers, who argued that seasonality and foreclosures skewed the data, aren’t likely to find this particularly pursuasive, but the Case-Shiller index showed a second-straight month-over-month increase in home prices around the country in July.
The 1.4% month-over-month increase outpaced the .5% gain from June. Importantly, even the “seasonally adjusted” numbers were up modestly, for the first time since the housing crash began. (Last month, the raw numbers were up, but the seasonally adjusted numbers still showed a slight decline.)
Those who argue that this is a “false bottom” or “head fake” attribute the jump in Case Shiller to a “mix issue”. In a nutshell, they argue that the usual seasonal boom in regular open-market sales is skewing the numbers because the level of distressed foreclosure sales has been relatively stable this year.
Voluntary open market sales will decline after July from the usual seasonality, this argument goes, and as they do the distressed foreclosure sales will again dominate more of the market. The “distressed” nature of these sales forces a lower price than an open-market voluntary seller might accept, which is why the mix skews the data.
The below chart shows the progression in YOY home price declines, which remains severe, though off the worst levels.
The following table gives the city-by-city breakdown:
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