January 05, 2011
Casey Mulligan has a blognote in the NYT today dismissing concerns about a double-dip in the housing market telling readers that:
“the price and construction data so far do not seem to suggest that home values will be significantly different this year than they were in 2010.”
Those looking at Mr. Mulligan’s charts will note that he only shows the Case-Shiller data on home prices through September. This is striking because the Case-Shiller 20-city index was released the last Tuesday of 2010. This index showed a price decline of 1.3 percent from September to October. Over the three months since prices temporarily peaked in July, at the expiration of the first-time buyers tax credit, home prices have fallen at a 9.2 percent annual rate.
Home prices in the bottom third of the market, which was most affected by the credit, are plunging in almost every city. These declines are likely to affect the higher end of the market in the year ahead since the people selling bottom tier homes are the ones buying more expensive homes. These data form the basis for most concerns about further declines in house prices. Without the most recent data it is difficult to make useful projections about 2011 prices.
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