If you just caught some of the national real estate market news today, you might have optimistically heard “As measured by prices, the housing market is definitely in better shape than it was this time last year….” That’s what Standard & Poor’s Case-Shiller said, in part, in its press release about its survey of twenty major metropolitan homes market activity during December 2009. The rest of the sentence, however, is “the pace of [price] deterioration has stabilized for now.”
Flagstaff is too small to be included in the SP/Case-Schiller survey, but Phoenix was considered a “bright spot” because housing prices rose 1.1% from November 2009 to December 2009. Phoenix home prices were down over 9% from December 2008, however, and the improvement from November could be because of seasonal adjustments in the data. According to the New York Times, without those statistical adjustments, home prices for most of the cities in the SP/Case-Schiller index actually fell in December and, in the Spring, seasonal adjustments will weigh the index down.
In contrast to the Standard & Poor’s/Case-Schiller report today, last week’s First American CoreLogic report on December home prices showed dropping prices. The contrasting reports show the difficulties in measuring home price data in this market. The Times reported “a widespread feeling among analysts that the market is being kept afloat by the government’s emergency measures, especially the tax credit for buyers.”
Indeed, earlier this month, an analysis by Standard & Poor’s itself predicted falling home prices in the near future as the overlay of “shadow inventory” is brought onto the market. The analysis forecast three more years to complete the sale of distressed properties before prices would begin to rise. The temporary rise in prices is seen in this S&P analysis as due to a “temporary constriction” in the number of homes for sale due to slow processing of foreclosures.
In other words, in spite of today’s report of some home price increases in December 2009, Standard & Poor’s agrees with the analysis seen elsewhere that home prices are unlikely to improve before 2013.
Remember, the value of any particular home requires analysis of the micro-market in which that home is placed. If you want to buy a Flagstaff home, hire an expert to analyze that market with you. If you need to sell your Flagstaff home, you need the same expertise. Contact me to buy or sell any Flagstaff home! | 
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