Chosen Best Palos Verdes Real Estate for Sale Realtors Agents Palos Verdes

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Rancho Palos Verdes, California, United States of America (Free-Press-Release.com) November 5, 2010 -- Chosen Best Palos Verdes Real Estate for Sale Realtors Agents Palos Verdes Chosen Best Palos Verdes Real Estate for Sale Realtors Agents Palos Verdes Chosen Best Palos Verdes Real Estate for Sale Realtors Agents Palos Verdes

Palos Verdes Real Estate For Sale Market Update

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Chosen Best Palos Verdes Real Estate for Sale Realtors Agents Palos Verdes

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Talk about confusion in the housing market. Standard & Poor's/Case Shiller monthly survey of 20 major housing markets came out today showing that home prices continued to fall in August, posting their first decline in five months. It was only a few minutes earlier that the Federal Housing Finance Agency had released its report on how home prices rose in August a mere 0.4%, indicating an improving but still weak housing market.

Now, who's right? Case Shiller or the federal government? Would you believe both?

How can that be you ask? Well, read carefully because when it comes to data like this, sometimes the numbers get lost in the weeds, or in the weed-like equivalent of what's known as "seasonal adjusted-basis." That's government speak for we got it wrong the first time and need to fix it.

As for the government's data on home prices in August, they rose 0.4% on a seasonally adjusted basis from July's revised figure, according to the Federal Housing Finance Agency's home price index.

Still confused? Not to worry. Here comes Standard & Poor and Case-Shiller to explain it all. According to them, home prices continued to lose steam in August, falling by 0.2% percent from the previous month. But then they say that more significantly, the annual rate of change, considered a more reliable indicator of ongoing trends, continued to shrink, with August home prices actually showing only a 1.7% increase from one year before.

Get it? No. How about this then? The annual rate of change has been cooling off over the past three months, ever since the 20-city index peaked in May at a 4.6 percent annual rate of growth. Increases or reductions in the S&P indices' annual rate of growth often signal changes in momentum in the housing market.

Still baffled? The S&P Index shows home prices declining in August in 15 of the 20 cities as compared to July. This decline ended a string of monthly increases, according to the S&P Case-Shiller home-price indexes, as effects from the expiration of a government tax credit continued to wear off.

Prices had been climbing since April, boosted by the expiration of the government's first-time home-buyer tax credit that lured waves of people to purchase homes before it expired. Growth had slowed in recent months as its effects waned. Before prices had started rising, they had fallen sequentially for six straight months.

Recent data suggest a standoff between home buyers and sellers may be easing slightly, as the annual rate of sales of previously owned homes climbed 10% in September from a month earlier, according to data released Monday by the National Association of Realtors.

Then come the government figures to muck everything up. The Federal Housing Finance Agency's (FHFA) home price index showed home prices in August rose 0.4% on a seasonally adjusted basis from July's revised figure. Here's where it really gets tricky. See, index had fallen the previous two months following the expiration of a tax credit for first-time home buyers at the end of April. The government's data showed prices month-on-month rose in five of nine regions, with the strongest performance in Oklahoma, Arkansas, Texas, and Louisiana.

Here's where the difference in these two reports becomes more understanding. The FHFA's index is calculated by using the prices of houses purchased with mortgages backed by Fannie Mae and Freddie Mac. The S&P Case-Shiller home-price index of 20-cities looked at all home values in those 20 cities not just those bought with help from Freddie and Fannie.

Now, if only they had told us this in the beginning we wouldn't have been so confused

Please contact us with any of your real estate needs. PV Brokers Residential Real Estate 310.684.3156 PV Brokers Residential Real Estate 310.684.3156

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