Home prices are rising, says the news. But are they really?  The cited data may be too old to be relevant.

Case-Shiller Index Says Monthly Home Values Up 5% in June

According to the Standard & Poors Case-Shiller Index, home values rose 5 percent in June versus the month prior, and 4 percent from a year earlier.

It’s the 16th consecutive month in which Case-Shiller reported an increase in home values and the third straight month of outstanding results.  On paper, the figures look great, but homeowners and home buyers in Cincinnati area would do well to temper their Case-Shiller enthusiasm.

For a few reasons, really.

The Obvious Flaws In The Case-Shiller System

The Case-Shiller Index is accurate, and imperfect. There's several reasons why we have to look deeper than the headlines.

First, Case-Shiller releases data on 60-day delay and, over the last 60 days, housing data has been lackluster at best.

• Existing Home Sales are down 27 percent
• New Home Sales are down 12 percent
• Homebuilder confidence is down

Knowing what the housing market did on June 30 has as little relevance as knowing what the weather report was from that day.  You can't apply the data from 2 months ago to make an informed decision today.

June is ancient real estate history to buyers and sellers in Cincinnati.

And, second, the Case-Shiller Index is not "local".  It's a composite of 20 cities, none of which are in Southeastern Ohio. Neither Cincinnati, Dayton, nor Columbus make the list, rendering the data somewhat useless to local folks anyway.

Click here for better, truly local real-time real estate data in Cincinnati.

Case-Shiller Is Good For Economists, Bad For Consumers

The Case-Shiller Index isn't all bad. After all, it's "good" data.  It's just delayed and general.  That's fine if you're an economist or policy-maker in need of clues on housing, but it ain't no good if you're trying to make a buy or sell decision.

For that, you need your real estate stats to be more better.

And then, when you've found a home and it's time for your mortgage, give me a call or .

(Post adapted from Bring the Blog, a blogging service for real estate and mortgage pros)

With home prices in gentle recovery and mortgage rates continuing to fall, home affordability is cresting in Ohio, and nationwide.

Mortgage Rates Drive Down Homeownership Costs

According to the Home Opportunity Index, more than 72 percent of homes sold between April-June 2010 were affordable to families earning the national median income.  The data is tracked by the National Association of Home Builders.

It's the second highest reading in the survey's history.

The data shouldn't come as a surprise because of how home affordability is calculated -- it's based on the combination of home prices and mortgage rates.  Home prices, as we know, were battered in the latter part of last decade and are only now making a modest recovery.

Mortgage rates, on the other hand, have been steadily dropping.  In the same April-June 2010 time period, conforming 30-year fixed mortgage rates fell by 1/2 percent.

A half-percent drop in mortgage rates saves homeowners $1,085 annually, assuming a $250,000 mortgage.

Where Homes Are "Most Affordable"

Like everything real estate-related, though, home affordability varies by locale.

For example, 97.2% of homes sold in Syracuse were affordable for families making the area's median income which earning the New York city its first "Most Affordable Major City" designation.  Indianapolis was the first quarter winner.

Here in Ohio, homes were especially affordable, too:

• Dayton : 92.8% of homes are "affordable"; 28th nationally
• Cincinnati : 88.4% of homes are "affordable"; 46th nationally
• Columbus : 88.1% of homes are "affordable"; 47th nationally

On the opposite end of the spectrum, the "Least Affordable Major City" title went to the New York-White Plains, NY-Wayne, NJ area for the 9th consecutive quarter.  Just 19.9% of homes are affordable to families earning the local median income.

Chicago ranked 175th.

The rankings for all 225 metro areas are viewable on the NAHB website.

When It's Time To Buy, You'll Need A Pre-Approval Letter

All things considered, buying a home may never be this inexpensive again. If you were planning to purchase later this year, or sometime in 2011, you may want to consider move up your time frame.  And you're going to need a pre-approval letter.

To get a mortgage application in-process or to see for how much you'd qualify, . I answer all my owns emails and am happy to get you started.

(This post adapted from Bring the Blog, a blog-publishing service for loan officers and real estate agents.)

At first glance, the July Existing Home Sales report was atrocious. Sales volume fell to 15-year lows, home supplies jumped 40 percent, and the press is beating the point to a pulp.

But, depending on your home's price tier, though, the news may not be so bad.  The real estate market is a tale of two price tiers.

Luxury Homes Recovering; First-Time Homes Flailing

For homeowners with property worth $1 million or more, the real estate market improved in July.  There's a number of reasons for this, and most of them are consistent with "an improving economy".

To make this argument, though, we must first make a very important assumption; that Americans buying homes worth $1,000,000 or more fall into one of four categories:

1. Holder of a large amounts of assets which makes annuity payments
2. Corporate-level executive with large salary
3. Highly-commissioned salesperson
4. Owner (or part-owner) or a highly-grossing business or practice

I make these assumptions because, as a loan officer, I know them to be mostly true. A homeowner will be approved for a mortgage without verifiable income and a $1,000,000 mortgage requires roughly $250,000 in adjusted gross income, assuming ordinary debts and deductions.

Now, although the economy is short on jobs and tight on credit, business spending has been improving for months.   The Fed has been highlighting this fact in its FOMC press releases, and just last quarter, business spending jumped 22 percent. And when businesses buy, corporations make money and salespersons get commissioned.

Just think. The Wynn in Las Vegas is remodeling 2,716 hotel rooms. That's a lot of purchasing and a lot of people are going to see bigger paychecks because of it. Bigger paychecks means more confidence in the future and a greater willingness to buy a new home.

Unfortunately, economics like this rarely trickle-down.

For Americans that don't directly benefit from business spending, therefore, Existing Home Sales data is worsening, relative.  Sales volume in the "starter home" categories are way down from June.  This is partly the result of the post-tax credit normalization, but also attributable to a dearth of W-2, salaried jobs.

Homeowners with property worth less than $1 million are seeing sales volume fall and sales supply rise. Home prices may start to lag within this price range.

Jumbo Mortgages Are Aiding The Luxury Home Markets

Coincidentally, the luxury housing is benefiting from the return of the jumbo mortgage market. It's a lot easier to buy a home when there's financing available for it.

Since mid-May, jumbo mortgage rates on ARMs have come way down, and financing has opened up in the 30-year fixed and 15-year fixed arena.  Downpayment requirements are loosening, too.

Just six months ago, you might have needed 30% downpayment at minimum to get a competitive mortgage rate on $1 million or more.  Today, it's 20 percent.

Furthermore, underwriting guidelines are loosening around credit scores, asset requirements, and loan purpose.

Overall, it's simpler to qualify for jumbo mortgages than in recent quarters.  This may be another reason why the luxury home market is thriving.

Your Bank May Not Offer Jumbo Mortgages

Jumbo loans are available, but that doesn't mean that every bank will offer them, or assign them competitive interest rates.  Make at least two calls before you settle on a particular rate-and-program because fees will vary. Then, if your bank makes you pay a point, .

You should be able to get excellent rates without points in the jumbo market right now. Remember -- each point equals 1 percent of your loan size.  Or, in the case of a $1 million loan, $10,000 in fees.

Reach out anytime. I answer my own emails and will help you with your jumbo loan.

Defining "All Real Estate Is Local"

There's an old saying that goes "All Real Estate Is Local".

In a nutshell, it means that real estate markets are different depending on where you live. Now, you could interpret that to mean real estate markets are different from region-to-region (e.g. West vs. Northeast), or from state-to-state (e.g. Ohio vs. Illinois), or even from city-to-city (e.g. Cincinnati vs. Columbus).

The true meaning of "All Real Estate Is Local", though, gets more granular.

Because of school district boundaries, public services, and local zoning laws, "All Real Estate Is Local" means that real estate markets are unique even from block-to-block.

As an exercise on how this works in real life, look at the six images above.

Notice how each of the six photos at top has its own vibe, its own character and its own flavor.  Allow these photos to represent different neighborhoods in your area.  Some are dog-heavy, some have families, some are hip.  Some slant young, some slant old, and some are blurry.

Each photo -- like each neighborhood it's meant to represent -- is unique and distinct.

The National Real Estate Mosaic

Now, look at the image below.

If you examine this photo closely, you'll spot your six neighborhoods in there. You'll see that there's one in the sky; another in the grass; another in the For Sale sign, and so on.  The picture at which you're looking, in fact,  is comprised of literally thousands of tiny "neighborhoods", each serving as a tile in the larger photomosaic.

And it's a terrific analogy for how we tend to get our real estate news -- we see the "big picture" and never the details.

We Don't Live In 50 States At The Same Time

How do you get your real estate news?  From the AP press wire? From newspapers?  From business television?

Each of these sources report on the mosaic, featuring stories about "soft housing" in America and "a growing number of foreclosures", but in the Carpenter's Run complex in Blue Ash, Ohio, the reality may be the exact opposite.

See, for homeowners and home buyers, getting that "whole picture" from CNBC is every bit as useless as Al Roker saying the national temperature is 83 degrees. None of us live in all 50 states at the same time.

Homes exists in one place and one place only; as a tiny square on the face of the national real estate market.  And when we say "All Real Estate Is Local", this is what we mean. Each market has its own characteristics which drive home values, buyer activity, and average days on market.

You can't get that kind of news from TV -- you can only get it from a local source.

Do You Want Local Real Estate Data? Find Your Best Source.

When you're buying or selling a home, you need good data.  Period.  There's no substitute for local market data and real-time reports.  The good news is that there's data available and it's usually free.

For Cincinnatians, there's excellent data at http://cincinnatirealestatemarketstats.com.  But, if you live somewhere else, don't sweat it --  just . I've been in this business a long time and have met some excellent real estate agents around the country.

Ask me for a referral -- I'm happy to make one.

Single-family Housing Starts eased lower in June, falling by 0.7 percent from May. This represents a grand total of 3,000 units nationwide.

You may have heard the Housing Starts story differently, though. It depends where you get your news.  The majority of headlines call June's data a disaster. I respectfully disagree.

For home buyers of new homes, and home sellers of existing homes, the data may be quite favorable.

Housing Starts Is A Composite

A “housing start” is a home on which construction has started; technically, a ground-breaking. It applies to homes of all types -- single family, multi-units, and buildings like condos and/or apartments.

Unfortunately, though, when the press reports on Housing Starts, it rarely singles out single-family homes. Instead, it lumps every type of home into a single, giant reading.

As a result, news outlets are reporting June's Housing Starts down 5 percent — a somewhat misleading figure.

The market for single-family homes is where the large majority of Americans buy and sell. Very few people buy and/or build brand-new multi-unit homes, or giant apartment complexes, by comparison.

Single-family housing starts did what everyone expected it to do once the home buyer tax credit expired.  It dropped.

But only by a tad.

June's Housing Starts Data Is Statistically Suspect, Too

However, although the government reports June's Single-Family Housing Starts down slightly from May, because of something called margin of error, we can't put faith in the findings. June's margin of error was 10.7 percent.

As the Department of Commerce noted itself, there is no actual statistical evidence to prove the change in starts from May was different from zero.  The "true" change could be anywhere from -11.4 percent to + 10.0 percent.

That's a wide range.

Ignoring Margin Of Error, Home Buyers And Sellers Smile

If Housing Starts did, in fact, drop in June, it means that housing inventory should fall in Cincinnati, a move that supports local home values. To home sellers, this is good news because it shifts negotiation leverage away from buyers. Fewer homes for sale means less competition for foot traffic.

For home buyers buying new homes, the news is favorable, too.

June’s Housing Starts data helps explain why home builder confidence dropped to its lowest level since April 2009 which, in turn, should create an excellent opportunity to "buy new" on the cheap. Home builders don't like being saddled with inventory and will often offer free upgrades and other incentives to move product.

Additionally, mortgage rates are better since the Housing Starts data release.

Get A Pre-Approval For Your Home Purchase

Home buyers need pre-approvals to show that they're serious about buying, and that a mortgage lender can qualify them for the home in question. Start your pre-approval and we'll handle the rest from there.

Pre-approvals take 4 minutes by phone and are usually completed within an hour.

(Blog post licensed and adapted from Bring the Blog)

Look around.  Home prices are still low (all things relative) and mortgage rates are ridiculous. It’s no surprise that home affordability is high right now.

Home Affordability Hits All-Time Highs

It wasn't supposed to be like this.  Housing was supposed to have recovered and mortgage rates were supposed to have risen.  But they haven't.  And it's creating an opening for today's buyers.

According to the Home Opportunity Index, a quarterly report joint published by the National Association of Home Builders and Wells Fargo, more than 72 percent of all new and existing homes sold between January-March 2010 were affordable to families earning the national median income.

It’s the second highest reading in the survey’s history.

Where Are Homes Most (And Least) Affordable?

Bay City, Michigan topped the 2010 First Quarter affordability list. 98.7% of homes sold there were affordable for families earning the area’s median income. The rest of the Most Affordable are similarly "small towns".

For bigger-city living, Indianapolis clocked in at the top.  95% of all homes sold in Indianapolis are affordable to the city's median income earners.

Other noteworthy rankings include:

At the bottom of the affordability list is the New York-White Plains, NY-Wayne, NJ region.  Just 20.9% of homes are affordable to families earning the local median income.

The affordability rankings of all 225 metro areas are available on the NAHB website. See where your town ranks and remember -- even if your city is near the bottom of the list, relative, affordability is very, very high.

Beware: Affordability Is Often Fleeting

Homes are affordable because of the unique state of the economy right now.  In other words, it won't likely last.

Home values are recovering in many markets and mortgage rates can’t stay this low forever. It's unnatural. All things equal, buying a home may never come this cheap again.

If you were planning to buy later this year, consider moving up your timeframe. And to get an idea of what mortgage payments would look like for a home in your area, and we can get started from there.

Standard & Poors released its February Case-Shiller Index this week.  The index is a home price tracker for select U.S. metro areas.

According to Case-Shiller, home values fell nationwide.

The Headlines Were Twisted To Look "Sunny"

Most of the 20 markets tracked by Case-Shiller fell in February. Only San Diego showed an increase. The other 19 Case-Shiller markets averaged a 1.23 percent decline between January and February.

However, that's not the story you might have read in the papers.

Instead, you may have seen that home values were up nationwide, citing annualized home price data. Unfortunately, data like that is mostly useless to buyers and sellers.  It's the month-to-month figures that matter.

Are home prices rising right now?  Are home prices falling right now?  These are the questions that set the tone of negotiation.  As in, "I don't care what your home was worth last year. This is what I'm offering today."

The rosier, annualized data that was highlighted in the press doesn't capture the reality of what was February 2010.

And that brings us another issue.  Even the Case-Shiller isn't the "right now".

The Flaws Of The Case-Shiller Index Exposed

For all of its popularity as a private-sector gauge of housing, the Case-Shiller Index is a broad view of housing, better suited for economists and politicians.  It does very little for the everyday homeowners.

First, the data reports on a 2-month lag.  The data we parse in May is collated from February's closing.  That's 2-plus months ago and, in real estate terms, 2-plus months is a lifetime.

Second, the Case-Shiller Index is limited to just 20 cities which, in total, represent just 9% of the U.S. population.  It's not even the 20 biggest cities, either.  Houston, Philadelphia, San Antonio and San Jose are excluded and each ranks among the country’s 10 most populous areas.

And, lastly, Case-Shiller ignores the First Rule of Real Estate -- all real estate is local. Even as the index highlights Chicago, it says nothing for how the Lincoln Park or Wrigleyville neighborhoods compare to Hinsdale.

The best real estate data is real-time real estate data.

Beat The Case-Shiller Index With Real-Time Data

Better real estate decisions start with better data.  If you live in Cincinnati, you should be getting these free weekly market reports -- no question.

If you live outside of Cincinnati and want to follow free, real-time real estate data for your market, just with your city, state and ZIP code.  If your market is covered, I'll hook you up.

As expected, the Pending Home Sales shot higher in February, boosted by the federal home buyer tax credit's April 30 deadline.

Pending Home Sales Spike

Versus the month prior, February's index rose 8 percent but remains well off the highs set last October.

For today's home buyers and seller, the Pending Home Sales Index is an important measurement. This is because a "pending home" is a property that is under contract to sell, but not yet closed.

According to the National Association of Realtors®, 80% of homes under contract close within 60 days, historically. Therefore, a higher Pending Sales figure in February projects that April's Existing Home Sales will be higher, too.

More Pending Home Sales Means Higher Home Prices

If you're a Cincinnati home buyer today, no doubt you've noticed the extra market activity.

On right-priced homes, multiple offer situations are more common; sales prices are settling closer to listing price; Days on market is falling. These are the signs of a buyer-heavy market.  It drives home supplies down and home prices up.

It's a good time to be a seller, in other words.  Especially as buyer activity looks poised to peak.

Get Ahead Of The Surge To Get The Best "Deals"

When the home buyer credit faced its last expiration in November 2009, we saw a pattern of buyers rushing to beat the deadline.  There's no reason to expect that won't happen again. And as it does, Pending Home Sales should continue to climb. Average home sale prices should rise.

Home buyers may find it smart to go under contract sooner rather than later. Pending Home Sales is a warning shot.  Higher home sales figures are ahead.

(Post licensed and reprinted with permission from Bring the Blog)

Author's Note: This post was written for Bring the Blog, a mortgage and real estate professionals' service that writes supplemental blog content. I am the owner of the company.  The local keywords "Cincinnati", "Blue Ash", and "Hyde Park" were added automatically via Bring the Blog's localization system.

More positive signals from housing -- home values are still on the rise.

According to the Federal Housing Finance Agency, after posting its first quarterly increase since 2007 this past September, the Home Price Index rose by another 0.6 percent in October.

Prices are up in 4 of the last six months.

But before we take the stats to the proverbial bank, it's important that we recognize the Home Price Index for its shortcomings.

1. HPI only accounts for homes with mortgages backed by Fannie Mae or Freddie Mac
2. HPI only accounts for re-sold homes -- newly-built homes are excluded
3. HPI aggregates national data whereas real estate markets are local phenomena

On a broad scale, the Home Price Index can be useful, but it doesn't specifically apply to Cincinnati or any specific U.S. market.  For that, analysts tend to turn to the Case-Shiller Index, a privately-produced report that assesses home values in 20 cities nationwide.

The good news for home sellers in Blue Ash and Hyde Park is that Case-Shiller's most recent report corroborates the government's conclusion -- home values are creeping back.

Home buyers should pay attention. When public and private sector data is in accord, markets tend to go along and, looking back, housing likely bottomed in February 2009.

Since then, home sales are up, home supplies are down, and values have increased in most U.S. markets. Furthermore, so long as mortgage rates remain low and government stimulus is in place, the trend should continue through at least the first quarter of 2010.

If you're on the fence about buying a home right now, or wondering about timing, consider your options vis-a-vis today's market.  Into the new year, homes won't likely be as cheap to buy, nor to finance.

Author's Note: This post was written for Bring the Blog, a mortgage and real estate professionals' service that writes supplemental blog content. I am the owner of the company.  The local keywords "Cincinnati" and "Ohio" were added automatically via Bring the Blog's localization system.

One day after November’s Existing Home Sales report blew away estimates, the Census Bureau’s related New Homes Sales report failed to impress.

A “new home” is a home that is newly-constructed; not bought as a resale.

In a lackluster showing, New Home Sales dropped 11 percent in November, falling to the lowest levels since April. Furthermore, the all-important “months of supply” climbed by a half-month to 7.9.

The press pounced on the figures and if you only read the headlines, you’d think that housing had cratered.

Some of the angles were quite bold, even:

• Weak U.S. Home Sales Show Recovery’s Shakiness (Reuters)
• New Home Sales Plunge In November (CNNMoney.com)
• Housing Forecast : Off Life Support, Still In Critical Care (CBS News)

And these headlines, although technically accurate, only tell half the story. The other half relates to November 30’s role as the original First-Time Home Buyer Tax Credit ending date.

See, different from home resales, when a contract is written on a newly-built home, the home is rarely finished.  This is the same in Ohio as in any state in the union.  According to the Census Bureau, just 1 in 4 such new homes are sold “move-in ready”.  The other 3 of 4 are in various stages of construction when a buyer signs on the dotted line.

Some have yet to break ground, even.

Regardless, it’s at this date of signing that the Census Bureau counts the home as “sold” — not at the actual closing.  This is the main reason behind the November New Home Sales data dip.

First-time home buyers in Cincinnati would have risked up to $8,000 in federal tax credits if they had (1) signed for a newly-built home and (2) it wasn’t ready for move-in by November 30, 2009.

It wasn’t until November 5 that the credit was officially extended, remember.

So, suddenly, the fact that first-timer home buyers represented more than half of last month’s Existing Home Sales isn’t so shocking. "Buying new" in Novembers carried a lot of risk.

There’s always more to the story than the headline.  Sometimes, you have to dig deeper.

Looking back over 10 months, the housing market is on a steady course of improvement. November’s New Home Sales data — although weak — is not terrible. Despite what the papers might say.

To get content like this for your mortgage or real estate blog, check Bring the Blog.

The housing market is in recovery. There's lot of stats to back it up so take your pick:

• Existing home sales are up and supplies are down
• New home sales are up and supplies are way down
• Pending home sales are posting at record paces

And, perhaps, most importantly, the best gauge of the housing market's health -- home values -- is showing consistent improvement.  Both private-sector Case-Shiller Index and the government's own Home Price Index showed home prices on the mend.

Foreclosures may not yet have peaked, but the worst of the housing market is definitely behind us. Anyone who tells you otherwise is selling something.

Between the 2nd and 3rd quarter this year, according to the Federal Home Finance Agency, home values rose 0.2 percent nationally.

Now, it's a statistic without direct meaning to homeowners because the "national real estate market" doesn't exist.  You don't buy a home in America -- you buy a home in Cincinnati.  The Home Price Index data remains important for trending reasons, however.  Especially to lenders.

See, unlike you and me -- people with a limited geographical exposure to the housing markets -- lenders are nationwide.  To them, national data is extremely relevant.

A "national" real estate portfolio is a lender's path to diversification.

So, as we dissect Q3's data, it's important to pick up on a few of the subtler points as compared to Q2.

First, geography does not appear correlated to home price improvement. Each region is represented equally in the Top 10 and spread equally throughout the list.  Clearly, this isn't just a Coastal Recovery.

And second -- stunning analysts -- is that home value changes are occurring independent from foreclosure activity.  For example:

1. California ranks #2 in home value improvement between Q2 and Q3 2009.  Over that same period, California's Foreclosures per Capita is second-worst in the nation, behind Nevada.
2. Illinois beat the national average for home value improvement between Q2 and Q3 2009.  Over that same period, though, Illinois foreclosure rate was nearly 3 times the national average.
3. Between Q2 and Q3 2009, Delaware's foreclosure activity was third-lowest in the country. Its home values, however, fell by more than any other state.

The supply-driven relationship between foreclosure rate and home prices is broken. This is because buy-side demand for homes now exceeds new supply is most U.S. markets.  The inevitable result is higher prices everywhere.

Low mortgage rates, an expanded tax credit, and general optimism about housing should sustain demand through the winter.  Therefore, expect home values to continue to climb further.  If you plan to buy a home in 2010, consider moving up your time frame.

The best "deals" may the ones you get between now and the Super Bowl.

To get a feel for what mortgage rates and payments look like in your local market, with the details of your purchase. I may have some follow-ups for you, but it's a good place to start.  I respond to all of my own emails and I'm pretty quick about it, too. I can send a Good Faith Estimate upon request.

The last two years have been rough on housing in a chain reaction-kind of way.

First, mortgage guidelines tightened, preventing some homeowners from ditching onerous ARM products.  That sparked a foreclosure boom that led to large losses on Wall Street.  In turn, it sank the U.S. economy.

Today, as compared to 3 years ago, foreclosures are way up, home values are way down, and mortgage rates are as low as they've ever been. It's wonderful news for home buyers -- there's a plentiful supply of homes and financing is cheap. Home affordability is near all-time highs.

But the market is changing.

Massive, sustained government stimulus has helped reverse the economy's slide.  There's still some rough patches, but overall, prospects look bright for 2010.

In housing, we can already see the improvement:

• The supply of new homes is down 40 percent this year
• The number of existing home sales are soaring in Cincinnati and other markets
• Pending home sales are as high as they've been since 2006

Furthermore, home prices are on the rise in the majority of U.S. markets.

The Buyers Market is over, folks. If you bought a home in February 2009, pat yourself on the back -- you timed the market bottom perfectly.  Both home prices and mortgage rates were troughing that month.  Since then, however, it's been a steady erosion and home seller are psyched about it.

For today's home buyers, mortgage rates remain low and home prices have a lot farther to climb.  Homebuying conditions may not be as perfect as they were 9 months, but, as compared to what we'll see next year, they're pretty excellent.  Especially because mortgage rates will cross 6 percent soon.

You can't lock a mortgage rate before you've found a home, but you can get prequalified and fast-tracked for one. Call or for a rate quote and help with your homebuying.  I answer all of my own emails and my rates are very, very good.

For the 7th consecutive month, the Case-Shiller Index showed a reduction in annual home price declines.  That's more than two seasons, folks. Surely, by now, we can say housing is in recovery.

And, even more impressive than the annual Case-Shiller figures are the monthly ones. 

According to the data, 17 of the 20 Case-Shiller markets improved between July and August 2009.  It's one fewer than last month's 18-of-20, but impressive nonetheless.

Market-by-market, the funk is ending. Home values are rising.

Lest we get carried away, let's remember that the Case-Shiller methodology is flawed:

1. It measures home values in just 20 U.S. cities.  Those 20 cities account for a paltry 9% of the U.S. population.
2. Its data is on a 60-day delay.  Case-Shiller doesn't reflect the "right now" of housing. It reflects the "just was".
3. It ignores the "all real estate is local" adage.  Case-Shiller lumps large metropolitan areas into one data reading.

Despite its flaws, however, the Case-Shiller Index remains relevant to housing.

See, as the economy progressively worsened throughout 2007 and 2008, Wall Street put the blame on housing, citing the Case-Shiller Index in support of the argument.  Analysts seemed to revel in the 33 percent drop in home values nationwide.

But now, as the Case-Shiller Index shows improvement, it's making a case that the economy is coming back from the brink.

An improving economy will harm home affordability.

Soon, government stimulus will fade, mortgage rates will rise, and sellers will regain the upper-hand in negotiations. Based on the Case-Shiller home value data, the "right time" to buy a home may have been in 7 months ago -- while the status of the recovery was still in doubt.

For a pre-approval letter for your next home, just and I'll get you started. You may have missed the market bottom, but this is definitely not the market top.  You may want to buy before the Case-Shiller runs its streak to a dozen.

If this isn't a housing recovery, than I don't know what is.

For the 6th consecutive month, the S&P/Case-Shiller Index posted strong numbers, a streak that dates back to February 2009.  It comes 3 years after an epic collapse that left many wondering if housing would ever recover.

It's clear now.  The answer is "yes".  Housing will most definitely recover.

That said, we can't rely on the Case-Shiller Index alone to tell us that housing has recovered.  This is because the Case-Shiller methodology is fundamentally flawed.

First, it only accounts for 20 U.S. cities which, in turn, represent just 9% of the U.S. population.  If you live in one of the cities not covered by Case-Shiller (i.e. Cincinnati, Dayton, Columbus), Case-Shiller has no local meaning to you whatsoever.

Omitting 91 percent of the population is a big deal.

But even if you do live in one of the 20 cities, Case-Shiller data is still kind of useless on a micro level.  This is because the measurements clump individual city neighborhoods into one group of data.  In Chicago, Lincoln Park and Rogers Park, and Andersonville and Bronzeville are all in the same sample set.

Real estate doesn't work that way.  Every neighborhood is unique.

That said, the Case-Shiller Index is still important. As the de facto barometer for home values nationwide, sustained strength in the Case-Shiller data means that the recession may be ending (or is already over).

Home buyers take note.

The combination of a soon-to-expire $8,000 First-Time Home Buyer Tax Credit and a rebounding housing market is creating intense competition for homes that may only get worse.  Bidding wars seem common lately and that can have a negative impact on home affordability.

If you're thinking about buying a home right now or wondering if the time is right, according to Case-Shiller, the "right time" may have been 6 months ago -- before the string of increases.  With values on the upswing, homes may only get more expensive.

For a pre-approval letter for your next home, and I'll get you started.

Sometimes, you have to look deeper than the headline to get the full story.

As reported by the National Association of REALTORS®, the number of Existing Home Sales fell last month, ending the report's 5-month winning streak.

Some newspapers are calling it a "setback" for housing.  Others are questioning the comeback.

Rest easy, folks.  August happened to be a terrific month for housing -- despite what the press says.

The Existing Home Sales report has 3 parts to it:

• Total sales volume
• Median sales price
• Overall housing supply

Of the three, housing supply is paramount to the long-term strength of the market. The other two are periphery.  It really doesn't matter how many homes are selling, or at what price they're selling.  What's more important is the ratio of home buyers to home sellers.

Not enough buyers and home prices fall.  Too many buyers and home prices rise.  The former led us into the housing doldrums, and now the latter is leading us out.

Between July and August 2009, existing home supply fell by nearly an entire month and, since peaking 9 months ago, supply is down 23%.

Furthermore, the supply of new homes is down, too, off 34 percent on the year.

Housing supply helps us statistically define "Buyers' Market" and "Sellers' Market" and, right now, the Buyers' Market looks like its ending.  If you've encountered a multiple-offer situation, you know exactly what I'm talking about, too.

The combination of low mortgage rates, relatively cheap homes and timely tax credits turned the housing market around this year and there's more gains ahead --  no matter what the papers say.

With home supply keeps falling, a full housing recovery is just around the bend.

(Post licensed by and adapted from Bring the Blog)

The housing industry's had a rough few years. Foreclosures are way up, home values are way down, and -- pardon my french -- but mortgage underwriters are so tight that if you stuck a lump of coal up their fist, in two weeks you'd have a diamond.

For home buyers, though, the "bad news" has come with a tremendous upside.

In housing, the basic law of Supply and Demand bestowed upon buyers an unbelievable amount of negotiation leverage.  Want a lower sales price? Just ask for it. Need your closing costs paid for? Write it into your offer letter. Want a quick closing? Sure, whatever you need.

But the Buyer Heyday may be over.  At least, that's what recent data suggests:

• The supply of new homes is falling at a precipitous pace
• Existing home sales are soaring in Cincinnati and other markets
• Home buyer activity is strong on all fronts -- first-time, move-up, and investor.

Furthermore, home prices are on the rise across a wide band of U.S. markets -- the smoking gun that the Buyers' Market is ending.

For now, mortgage rates remain low and the government is still supporting first-time home buyers with a generous tax credit.   If you're on the fence about buying a home or what to do next, call or .  I'd like to be your loan officer and if by chance I'm not licensed in your particular state, I'll point you to somebody that is.

Maybe now we can say that housing has bottomed?

After 3 years of disastrous data, 19 of the 20 markets tracked by Case-Shiller improved last month -- the 5th straight month of strong data and the index's strongest showing in 3-plus years.

This is definitely something for the news van.

That said, the Case-Shiller Index remains an imperfect gauge:

1. It's limited to 20 U.S. cities, representing just 9% of the U.S. population.
2. It's on a 2-month lag, reflective of how housing was, not how it is
3. It ignore locality, grouping city neighborhoods into one big lump.

Despite its flaws, though, the Case-Shiller Index remains relevant to an improving economy.

When housing cracks first started formed in 2005 and 2006, Wall Street doubled down its bets despite Case-Shiller calling for an all-out catastrophe of biblical proportions.  Turns out, both sides were wrong, but Case-Shiller earned a ton of street cred from its call.

Today, the Case-Shiller Index is the de facto barometer for home values nationwide.

Getting back to June data, because Case-Shiller says home prices are -- in its own words -- "on an upswing", we can assume it means good things for the housing market, in general.

For home buyers, however, the news may not be so welcome.  The combination of a soon-to-expire $8,000 First-Time Home Buyer Tax Credit and a rebounding housing market means that competition for properties should increase, creating bidding wars and higher home prices.

If you're on the fence about buying a home or wondering if the time is right, according to Case-Shiller, the "right time" may have been 2 months ago.  With prices on the upswing, homes may only get more expensive.

For a pre-approval letter, and I'll get you started.

For the 4th consecutive month, the Case-Shiller Index showed a softening in year-over-year home price declines.  As a standalone story, this is news.

Even more relevant to homeowners than the annual Case-Shiller numbers, though, are the monthly ones.   According to the data, 18 of the 20 tracked markets improved between April and May 2009.  It's the Case-Shiller Index's strongest showing in nearly 3 years and yet another sign that housing is on the mend.

That said, the Case-Shiller Index is far from perfect:

1. Case-Shiller measures home values in just 20 U.S. cities.  Those 20 cities represent but 9% of the U.S. population.
2. Case-Shiller on a 2-month delay.  It is not reflective of the current state of housing, but of the way is was.
3. Case-Shiller ignores the "all real estate is local" adage.  It lumps disparate city and suburban neighborhoods together.

Despite these flaws, though, the Case-Shiller Index remains relevant to housing.

Remember -- stock markets tanked as housing went bad in 2007 and 2008.  Americans lost their savings and their homes.  Huge, historied banks went bankrupt and Fannie Mae and Freddie Mac got nationalized.  Today, a lot of people believe that rising home values could undo some of that damage.  Maybe even most of it.

And this is why the Case-Shiller Index -- however imperfect -- is still so important.  Its recent strength is surprising and may be foreshadowing the end of the U.S. economic recession.  As home prices go, so goes the economy and, recently, home prices have been rising.

All in all, it's just another brick in the housing recovery wall.

The housing industry's had a rough few years.  Foreclosures are way up, home values are way down, and -- pardon my french --  but mortgage underwriters are so tight that if you stuck a lump of coal up their fist, in two weeks you'd have a diamond.

The upside of it all is that today's home buyers have an unprecedented amount of negotiation leverage with the sellers.  Want a lower sales price? Just ask for it.  Need your closing costs paid for? Put it in your offer letter.  Want to close in 30 days?  The world is your oyster.

A look at the recent statistics, though, suggests the market is morphing.

• Sales of new homes are rising at the fastest clip in a decade
• The supply of existing homes is falling month-by-month
• Home buyer activity continues to surge

Furthermore, home prices are no longer falling in many U.S. markets.

So, all this to say, if it hasn't happened already, home buyers are about to lose their upper-hand with their sellers.  And when they do, buying a home won't be nearly the "deal" it may feel like today.  Especially once mortgage rates head back up and the $8,000 First-Time Home Buyer Tax Credit meets its December 1 expiration date.

After all that, home sellers will be back in the proverbial driver seat, moving homes for more money and with fewer concessions.  Indeed, housing data suggests that this is happening in some markets already.

They say today's housing market is a Buyer's Market.  Well, it's only a buyer's market if you actually buy.

If you're thinking about buying but are on the fence about what to do next, call or .  I'm happy to work with you and, if I'm not licensed in your particular state, I can definitely point you in the right direction.

Each month, a real estate trade group publishes the Home Affordability Index, a measurement that accounts for home values, interest rates and family incomes to determine whether housing is getting more -- or less -- affordable for average Americans.

The Home Affordability Index a flawed report for a number of reasons.  For example, the index makes the 3 broad assumptions of:

1. A national median home value despite its complete irrelevance as a metric
2. An average mortgage rate that ignores state rate changes and LLPA differences
3. A national median income that doesn't account for Cost of Living differences

In addition, the index is easily influenced by mortgage rates.

If we account for the 0.75% increase to rates over the last 5 days, the Home Affordability Index falls by 10 points to its lowest levels since December 2008.

Each of these issues undermine the Home Affordability Index's significance to housing.  However, we can't ignore the report entirely because it's a relative finding, measuring change in costs from month-to-month.  As home values have fallen and mortgage rates have, too, both the up-front and on-going costs of homeownership have dropped.  This realization is converting a bevy of long-term renters into first-time homeowners. 

It's also fueling a boom in home sales.

In April, the number of MLS-listed homes that went under contract rose by an astounding 7  percent.  It's the biggest one month jump in Pending Home Sales since October 2001, not coincidentally, the second-to-last month of the Early 2000s Recession.

Now, not every home under contract will make it to the closing table.  It's estimated that only 80 percent of them do.  But with so many potentially sold homes , you can't help but think that the economy is going to get a nice kick in the kiester sometime mid-summer. 

See, when "pending homes" become "sold homes",  things start to happen. 

Moving supplies get ordered; new furniture and appliances get bought; painters and landscapers get hired.  Money gets spent and the economy moves forward.  This is a well-known chain reaction and it's one reason why economists say the economy can't improve until housing improves -- home buyers spend too much money to have it otherwise. 

Traders agree.  The Materials and Consumer Staples sectors were the top two performers on Wall Street Tuesday.

Pending Home Sales are rising and it's a signal of strength.  From the data, we can infer that the number of active homebuyers is higher than in months prior and that will, eventually, create pressure on home prices to rise.  It hasn't happened yet, but when the demand for homes does finally exceed the supply, home values should turnaround in whichever neighborhoods the imbalance occurs.

Meanwhile, so long as mortgage rates remain below 6 percent while the government incents first-time home buyers, that turnaround could happen sooner rather than later.