ZERO Never Looked So Good

June was the first month single family home values didn't decline since February 2007 according to Case-Shiller Index results published yesterday. In fact, the exact change in single family home value in South Florida was an increase of .54%

Of course, one month does not a market-change make but the numbers have been pointing toward this eventuality for a few months now. This should give buyers a green light to move forward and homeowners/sellers some solace that the worst of the decline is over.

There are lots of comparable sales now to help buyers and sellers determine what the 'new normal' is. Feel free to give me a call to find out what values are in your area of interest.

The 'End' in Sight?

We're starting to see some credible data to support a prediction of the market bottom. Once again I look to my revered Case-Shiller Index (remember Robert Shiller got it right in the heady years of the market boom) and have plotted the actual index against what I'm calling 'normal appreciation' (the average increase of home values for the 13 years before the boom began).

The large chart shows the 22 year history of the index measurement in South Florida; the inset focuses on the change so far in 2009. As you can see, the actual value index (the top line) is rapidly moving toward the 'normal' trend line below.

I suspect we'll see these lines cross as actual values will fall below the trend line as an over-correction is likely but I also sense values will fairly rapidly rise to return to the trend after bumping along the bottom for a few months.

OK...there you have it...I'm on the limb with a prediction (sort of). In any event, it's a great time for buyers (with better housing value and low interest rates) and sellers with long term equity can pretty closely predict the value of their property by applying the trend appreciation from their date of purchase (especially if that purchase was before 2001).

What's Normal?

OK chart-junkies...here's anther creation. I plotted the Case-Shiller value index for the 22 years the index has recorded data for South Florida. I split the chart up into:

"Normal" 1987 to 2000

"Boom" 2001 to 2006 and

"Bus..."; I mean "Change" 2007 to present.

This study would suggest that normal appreciation of single family homes is about 2.98% (the annual rate for 1987 to 2000). We experienced over 100% appreciation in just 5 years and have given back just under 65% in the last few years.