According the Federal Home Finance Agency’s Home Price Index, home values are now off just 12.5 percent from their April 2007 peak nationwide. This, after a half-percent monthly increase in prices in May, on average.
Given the state of the market since April 2007, the Home Price Index results are a positive for both the housing market and the economy, but we have to remember that May’s half-point increase is an average, and not specific to a particular area.
In contrast to “national markets”, the real estate markets in which you and I live are decidedly local. It’s a major difference and the distinction renders the Home Price Index somewhat less important.
After all, the HPI doesn’t account for housing activity in individual neighborhoods like Quail Creek , nor does it track value across cities like Edmond. Instead, it summarizes data in giant chunks of geography.
A quick look at the HPI regional data proves the point. Of the HPI’s 9 tracked regions, only one was within one-tenth of one percent of the national, half-point average. The others varied by as much 1.3 percent.
As a sample:
- Mountain Region : + 1.7 percent
- New England : + 0.2 percent
- South Atlantic : +1.0 percent
And this is on a regional basis. The HPI’s applicability to state, city and neighborhood markets is even less appropriate.
Real estate values cannot be captured in a national survey. For home buyers and seller, what matters is the economics of a block, on a street, in a neighborhood. That type of granularity can’t be tracked in a report like the Home Price Index.
The best place to get that data is from a local real estate agent that knows the market well.