Home Prices Survey Challenged By Local Realtors
New figures from Standard and Poors’ show reduced home prices in 18 of the 20 cities used to make up its Case-Shiller Index, including Greater Cleveland.
The report shows home prices here were about 2.6% lower in October, the most recent month for which full figures are available, than in the same month in 2009, and that prices fell one-point-five percent from one month earlier.
A press release quotes David Blitzer, Chairman of S&P’s Index Committee, as saying “There is no good news in October's report. Home prices across the country continue to fall." But there is more to judging a market's strength than reviewing raw data, says Hoby Hanna, President of the Howard Hanna Real Estate Company that operates in Ohio, Pennsylvania, West Virginia and New York.
"The Case Shiller numbers says prices are down, but they are also taking into effect every sale in Northeast Ohio."
...and that includes foreclosures, short sales from underwater mortgages, and properties that he says banks are simply dumping.
"A computer program can't see that - algorithms can't see that. Taking all the recent sales and trying to dump that into a mix of comps... isn't fair."
Hanna says including all the so-called “distressed transactions” in the calculation depresses price averages, and are not representative of better prices some sellers are actually getting for their homes.
October was the fifth consecutive month the Case Shiller survey indicated growth rates dropping nationally. In six cities, prices were the lowest since 2000, a level Cleveland had reached 20 months ago, and has somewhat rebounded from.
Hanna says despite the new numbers, several month-to-month increases earlier this year, combined with Cleveland's relative housing affordability, cause him to feel optimistic about 2011.
The next Case Shiller numbers will be released January 25th.