“$!#!%#@! Case-Shiller”

A lot of Twin Cities Realtors today are muttering variations on the above in the wake of yesterday’s latest housing statistics.

If you’re not aware, Case-Shiller’s just-released March numbers indicate that the national housing market has officially now re-tested its lows (“double-dipped”), and that Minneapolis is the worst performing major U.S. market over the last 12 months (down 10%).

In turn, that news is prompting not a few local Buyers (and just-closed Buyers) to call their Realtors for their reaction(s) — and reassurance.

Realtor Take


Case-Shiller’s “matched-pair” methodology overcomes the apples-to-oranges problem inherent in many other housing market gauges.

However, in only tracking homes that have re-sold during a specific time period, it introduces other problems.

Such as:

–Case-Shiller doesn’t break out foreclosures vs. non-foreclosures.

When foreclosures account for something like half the market — the case locally this Spring — it’s likely that Case-Shiller will overstate price drops.  That’s because foreclosures are concentrated at the lower price rungs — and are deeply discounted by their bank-owners.

–Reason(s) for deep discount.  

Of course, one of the reasons foreclosed homes sell for such a deep discount is their (poor) condition.

While Case-Shiller attempts to correct for this, the only way I know to assign an accurate discount for various damage and neglect is to tour the inside of the home — something Case-Shiller doesn’t do.

Bottom line?

It’s misleading to take statistics dominated by distressed home sales and generalize them to the overall housing market.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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