From HousingWire’s summary of Morgan Stanley’s latest Housing Markets Insights report:
Morgan Stanley analysts are questioning the power of national home price indices, saying that local ‘shift-in-mix’ impacts may overcome the veracity of such large measurement values.
In their latest Housing Markets Insights report, the analysts for the investment bank are asserting that the notion of a national housing market that can be quantified in an index, such as Case-Shiller, RPX – and even Morgan Stanley’s – no longer “reflect what we believe to be the actual changes in home prices,” they say.
“While greater macro trends can certainly affect housing across the country, individual markets can deviate substantially from each other,” write researchers Oliver Chang, James Egan and Vishwanath Tirupattur. “We remain convinced that actual home prices may have more to fall, regardless of what the major indices may report.”
Mix? Who’s ever heard of such a ridiculous thing. And specific to the San Francisco MSA:
“For the city that shows the highest YoY gains in the major indices, we find that it is actually showing the beginning of a double-dip with non-distressed prices aggregated across square foot tiers down 1.2% YoY, short sales down 2%, and REO liquidations up 20%,” the report concludes.
See chart above.
∙ Morgan Stanley Questions Power of Home Price Indices [HousingWire.com]
∙ Medians Are Up, But Don’t Confuse That With Increasing “Prices” [SocketSite]
∙ May Case-Shiller: San Francisco Tiers Up But Gains Moderating Atop [SocketSite]