Peak Housing Market Propaganda

I was chatting with an Denver-based real estate professional yesterday. This person stated outright that the real estate market was in an insanely overvalued bubble that was going to pop.
It’s pretty obvious to anyone who makes the decision to look at the facts. For instance, the media, Wall Street and industry association promotional juggernauts (National Association of Realtors, National Association of Homebuilders) continue to gloat over the supposed continuous price increases being reported by highly statistically unreliable data series like the Case-Shiller housing price index (Even Robert Shiller has admitted to this series’ flaws in the past).
Every metric promoted in the headlines is based on ‘year over year’ comparisons. A far different truth emerges when you shine the light on month to month changes in price. In fact, I linked an article in a blog post earlier this week (LINK) which showed that 30% of all homes across the major MSAs lost value over the last year. In many markets, prices have been declining for most of this year to date when measured serially month to month.

This post was published at Investment Research Dynamics on October 31, 2015.