Are SF, Phoenix Home Prices Really “Surging?”

A tight supply of homes and an increase in affordability fueled by record-low mortgage rates are helping shore up some regional markets where values plunged during the recession. San Francisco’s home prices surged at a 16 percent annual rate in the three months ended in April, while Phoenix gained at a 26 percent rate, according to Case-Shiller.

–“Housing Exuberance Led By Shiller’s U.S. Glamorous Cities“; Bloomberg (6/27/2012)

Are home prices really “surging” at double-digit rates in San Francisco and Phoenix at the moment?

Not exactly.

So, where did Bloomberg get its statistics?

By multiplying the most recent quarterly increases for San Francisco (4%) and Phoenix (6.5%) by four.

Using the same  legerdemain logic, you could say that the stock market — up 2% in the last 3 trading sessions — is “appreciating at a torrid 160% annual rate” at the moment.

See also, “Spinning — and Backspinning — the Latest Housing Sales Numbers“; “Lies, Damned Lies & Realtor Statistics;” “Misleading Short Sale Statistics;” and “When Realtor MLS Statistics Are Misleading.

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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