THE BASIS POINT

January 2020 U.S. home prices 59% above post-crisis lows of February 2012

Today S&P Case Shiller released November home price data, which feels old, but is still a reliable U.S. home price dataset. The main headline: January 2020 home prices are 59% above post-crisis lows reached in February 2012, and are 15% above pre-crisis peak. You can see this in 2 charts below.

U.S. Home Price Summary As of January 2020

S&P Case Shiller Home Prices Nov 2019 15 percent above pre-crisis peak The Basis Point

S&P Case Shiller Home Prices Nov 2019 59 percent above post-crisis lows The Basis Point

S&P said that November showed 3.5% increase in their national composite index, and that every city in their 20-city composite showed year-over-year gains. You can see this in the table below.

S&P Case Shiller Home Prices Nov 2019 all 20 city composite gains The Basis Point

What Do Home Prices Mean To Me As A Homeowner or Buyer?

Homeowners have done very well since 2012. This may continue for awhile as interest rates hold lows and inventory remains short. Less supply means more buyer demand, which means prices are steady.

Homebuyers should note that last statement. Prices should remain steady, and homebuying is a long game. If you intend to live in a home less than five years, you should consider whether you even want to buy. The math doesn’t pencil well when you factor in buying and selling costs in less than 5 years. Usually better off renting.

But if you’re keeping the home for longer than 5 years, and especially if you’re keeping it long-term, it’s still more favorable to buy than rent in many U.S. markets.

As for some prices, this S&P Case Shiller data is indeed old. It’s November data, and based on homes that got into contract up to 60 days before November. Meaning, buyers wrote offers that got accepted by sellers in September and October, then the homes closed in November. That’s what goes into this data.

Also the 10 and 20 “city” data in the table above isn’t cities, it’s broad regional areas consisting of multiple counties.

For example, “Minneapolis” is 13 counties, and “Atlanta” is 28 counties.

So you have to dive into your hyper-local market to really understand pricing. Below are a few links on how to do this.

Reference:

House Hunting? Street Knowledge Beats Charts

How To Price A Home Locally (hit: look beyond Case Shiller data)

Rent vs. Buy: The Most Important Housing Decision of All Time

Source: S&P Case Shiller Home Price Report