Home-price index finally lines up with local reality

Data on Phoenix home prices from the monthly New York-based S&P/Case-Shiller's Home Price Index isn't usually very popular with Arizona real-estate market watchers, mostly because it lags local data and often shows much bigger declines in values than local data.

But the most recent national index, released Tuesday, appears to be closer to local data gathered from public records and the Arizona Regional Multiple Listing Service.

S&P's index shows metro Phoenix home prices were flat from April through May of this year, which is what most local data showed.


The real test for S&P is if it shows metro Phoenix home prices ticking up slightly between May and June, which they did, according to the Phoenix-based Information Market.

Building update

Permits for new homes ticked up slightly in June, according to the "Phoenix Housing Market Letter." There were 643 homes built in the region last month, compared with 589 in May.

Publishers of the report, RL Brown and Greg Burger, say that the small increase is encouraging but that the region's homebuilding market won't come roaring back until the job market recovers.

Foreclosure hub

Chicago is now the poster child for the largest inventory of foreclosures.

The Windy City takes the top spot from Phoenix, Miami and Los Angeles, all of which have carried the dubious title during most months since the foreclosure crisis hit.

According to RealtyTrac, Chicago now ranks first among the nation's 20 largest metro areas for foreclosure inventories.

Market watchers say foreclosure backlogs in courts and lenders' reluctance to modify loans are a big problem for Chicago now.

Bullish analyst

All real-estate analysts agree that more jobs are key to a recovery.

The key used to be slowing foreclosures, but that is already happening.

Michael McDonald, a real-estate consultant and stock-market analyst, is bullish on metro Phoenix's housing market.

McDonald recently wrote an article on seekingalpha.com about the region.

"There are strong indications that the long-awaited housing recovery is about to begin in the city (Phoenix) that became the poster child for homebuilding excess," he wrote.

"Careful calculations show the once-scary shadow inventory in Phoenix is no longer as large as many thought, and what remains can effectively be cleared out in about a year."

by Catherine Reagor The Arizona Republic Jul. 27, 2011 12:00 AM




Home-price index finally lines up with local reality