Consistent with the most recent Case-Shiller Index, the government’s Home Price Index said home prices rose between July and August.
The Federal Home Finance Agency’s data showed values up 0.4 percent nationwide, on average. Region-by-region, however, the results were scattered. Coastal states tended to perform poorly. Plains states tended to perform well.
A brief look at the regional disparity:
- West South Central : +1.5%
- East North Central : +1.2%
- Pacific : -0.2%
- South Atlantic : -0.2%
Breakdowns like this are important because they highlight the fundamental problem with national real estate data and that’s that home buyers in Chicago don’t buy real estate in a national market, or even a regional one.
Buyers buy local.
When we look at national figures like the Home Price Index, it’s important to remember that real estate is a collection of tiny markets which, when lumped together, form small markets which, in turn, lump together into larger markets and so forth.
To illustrate this point, a deeper look at August’s Home Price Index data shows that, within the aforementioned Pacific Region, in which home values fell 0.2%, the state of California posted a 2.9% increase. You can be sure that within the state of California, there are cities that performed better than the 2.9 percent, and within those cities, there are neighborhoods that did the same.
Real estate is most definitely local.
That said, we can’t discount the national report entirely. Broader housing statistics like the Home Price Index reflect on the economy and are often used to help shape policy in the nation’s capital. When you need to know what’s happening in your hometown, though, your best source of data is a knowledgeable real estate professional.
