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What’s been happening to home prices lately? It would not be surprising for most consumers to say that prices have been falling...and falling. True or false, perception is reality, and the determining factor in directing consumer behavior.
Here’s the actual graph of the Case-Shiller price index reflecting the 20 metro markets the index tracks:
Compared to the fast run-up in prices in the boom years and then subsequent harsh crash, the remarkable stability in home prices from 2009 to 2011 should be noted. For three straight years, home prices on average have not moved up or down in any measurable way.
However, despite that fact, consumers are repeatedly informed home values continue to fall sharply. That is not a confidence builder for consumers. When the report for the Case-Shiller data comes out tomorrow (Tuesday, October 24th), expect news coverage to center around how much prices have fallen (about 4 percent) from one year ago, even though it will clearly show prices have been rising in the past few months, and in fact are higher than the low point early this year, or even the low point in 2009.
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