As Wall Street prepares for today's report on housing sales prices, some experts argue that the gold-standard index for tracking the market may be falling behind the times.
Are higher asking prices unrealistic, or is Case-Shiller compiled too slowly to catch the turn? And do higher asking prices signal an approaching return to mid-single-digit annual appreciation, after housing's 33% tumble since 2006?Standard & Poor's Case-Shiller index for home sales closed in June is expected to show a 1.5% decline from this time last year and a seasonally adjusted gain of 0.1% from May, according to Moody's Analytics. But data compiled by sites such as Trulia.com suggest asking prices are now rising faster.
"It suggests that we'll continue to see increases in the Case-Shiller at least through September, which will be the sales they report in November," Trulia chief economist Jed Kolko said.
Case-Shiller's data are relatively slow for two reasons. The homes it reports on have to be sold. Second, the laborious process of compiling data from top markets to calculate the national index takes long enough that June figures are just coming out. Prices for those homes may have been set as long ago as March or April. Case-Shiller's authors think that's a worthy tradeoff for greater accuracy, says David Blitzer, chairman of the index committee at S&P Dow Jones Indices.
In the meantime, asking prices rose 1.2% in the three months that ended in July, compared with the prior three months, according to Trulia. They climbed 4% or more in at least 10 markets, including Birmingham, Ala., and Omaha.
Opinion is divided over whether this can last.
Realogy, parent company of Coldwell Banker and Century 21, said Aug. 7 that July sales prices rose by "mid-single digits," which it expects to last through year's end. At HomeServices of America, the second-biggest national realty firm, executives said higher asking prices are sticking in many markets.
But the jump may prove premature, said Stan Humphries, chief economist at Zillow.com.
Slower job growth in the second quarter, plus expectations of slower second-half expansion and federal budget austerity next year, could scare buyers, he said. And a shortage of lower-price homes for sale may be inflating asking prices, he added.
"I hesitate to say, 'Don't look at (asking prices),' but a lot is going on," he said.
