The headlines and sound bytes have finally been substantiated by my favorite real estate yardstick, the Case Shiller Value Index: 2012 was a very good year. I like the CSVI because rather than comparing aggregate sales amounts, the CSVI compares the price of each property sold in a period (e.g. December 2012) to that property’s previous selling price and crunches it into an index with all other sales in that month. I report the change in these index figures in these updates.
The attached graphic shows month-over-month value change. As you can see, 2012 had 11 months of increasing value and ended with 10.65% growth for the year. This is the first year the index hasn’t declined since 2006. Some may be concerned that growth at this rate suggests the beginning of another bubble, but I’m not too concerned since the methodology of the index reflects purchases of distressed homes that were rehabilitated and sold at market value. As we work through the inventory of foreclosures/short sales, the market should return to a sustainable (dare I say healthy) level.
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