S&P Case-Schiller Reflects Price Increase

As we mentioned in previous posts – if you set out your investment plan, find the right property to buy and work with a solid team of professionals – this is a strong market in which to be a real estate investor.

Recent data from the S&P/Case-Schiller Home Price indices supports this point.

The Case-Schiller index tracks changes in the value of residential real estate nationally as well as in 20 metropolitan regions. The indices are designed to measure increase or decrease in the market value, with the data being released on the last Tuesday of each month and having a two-month lag time in data that is reported.

In all 20 U.S. cities included in the S&P/Case-Schiller home price index, February house prices increased year over year, and 14 of 20 posted a month-over-month increase. Portland (up 11.9%), Seattle (up 11%) and Denver (up 9.7%) posted the largest year-over-year gains.

This data is for those who are interested in whether prices are going up or down and by how much.

For Seattle, the S&P/Case-Schiller report breaks sales evenly into 3 price tiers:
• Low Tier: less than $306,265
• Mid Tier: between $306,265 – $488,630
• High Tier: above $488,630

The current index for Seattle is included below:

Case-Shiller_Sea_Tiers_.2.16

This graph shows that all three price tiers continue to increase in value into 2016.

A graph that may be more interesting to those who invest in the low-end fix and flips, is the value % against the past peak.

According to these numbers, the low tier is still 10.4 percent off it’s past peak, while the middle tier is still 3.7% below and the high tier has risen above the July 2007 peak by 1.4%

Case-Shiller_Sea_Tiers from peak

Without a crystal ball, it’s impossible to say where residential values are going next month. But we can certainly see a trend in these graphs and a particular gap yet to be closed by properties in the low tier.

Do you believe that low and mid tiers will catch the high tier and exceed their past peaks?


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