Here’s an article from the AP that now reads “S&P index shows plunge in November home prices“, though when I found it yesterday the headline was “S&P index shows posts sharpest decline in home prices on record”!
I think you’ll agree the latter is a bit more eye catching, if not dramatic.
The point is though, that there really isn’t much of a story here since the index they are talking about (the S&P/Case Shiller Home 20-city housing index) only covers prices since 2000!
Essentially, after housing prices posted one of the largest (if not THE largest) increases in history, they have now falling dramatically. Sorry, but isn’t this to be expected? Assets don’t increase in value forever.
This is like using the value of the NASDAQ from 1998 – 2003! Using an index with an 8 year history is akin to basing your entire world view on your experiences in a single week of your life! There’s no historical perspective here.
We already know that the housing market is in decline, but skewed statistics like these don’t help the situation.
Interestingly, the index itself goes back 20 years, so I’m not sure why they only cover from 2000 in this article…
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