Yesterday, the S&P Case-Shiller report was released.
The S&P/Case-Shiller Home Price Indices are the leading measures for the US residential housing market, tracking changes in the value of residential real estate both nationally as well as in 20 metropolitan regions.
Home prices in all 20 metro areas included in the index rose for the second month running. Phoenix led, with a 23% annual increase followed by San Francisco (18.9%), Las Vegas (17.6%) and Atlanta (16.5%). Los Angeles came in with an annual increase of (14.1%). Still, Robert Shiller, co-creator of the index, is cautious. “There’s a lot of excitement in the housing market now but it might be just short term,” he tells The Daily Ticker.
In case you didn’t know, Robert Shiller, leading economist and contributor to the Case-Shiller report correctly predicted the recent housing bust and is highly respected. Because of this he tends to be subtle with his responses and only hints at what he truly feels.
When asked where this all leaves the housing market 10 years from now, Shiller says home prices will be “about where they are now” after adjusting for inflation.

So in reality, home prices will not be around where they are now after adjusting for inflation for the average buyer if their income isn’t going to rise fast enough to catch up with inflation. Therefore in essence home prices will rise, but along the line of inflation.
The good news is home prices won’t be an exploding bubble that will bust so that should be reassuring for buyers and homeowners to know that their home will be on a stable rise through the next 10 years. After all, it is still a good time to buy or move up given the low interest rates and steady but rising home prices.
SOURCE: S&P Case-Shiller Report
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If you have any questions, feel free to contact James Y. Kuang at (626) 371-5662 or by email - james.kuang@coldwellbanker.com
Originally Posted On WEDNESDAY, MAY 1, 2013
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