Case Shiller IS NOT Reliable at the Local Level

Written by Posted On Monday, 02 December 2013 08:22

Location, location, location. Remember that any time real estate reports are provided. One size reporting does not fit in Atlanta; reports like Case-Shiller and even local MLS data is fine for national and regional audiences but meaningless at the micro market level. Median prices are up over the last year – but how much and why has to be explored. Each area is different; small areas within even the MLS area are different. Looking down to the high school-middle level is a good idea and being specific with the type of home considered is also advisable.

Atlanta is far to diverse to be considered as a single entity. How does activity in East Point correlate to activity in Cumming? Snellville data relate to Douglasville? And those distant points to Midtown and VA Highlands? North Fulton to South Fulton? The AJC touched on this and cautions readers to keep the data in context (CLICK HERE if they want to charge to read it). Case-Shiller say’s the Atlanta market is up 19% and MLS data shows it up 35%. Please.

Consider the big picture (all Atlanta market MLS regions) then the breakout by smaller MLS regions for 3rd qtr ’13 activity:
  • 20%+- of all sale were distressed but areas ranged to as low as 4%+- to almost 50%+-
  • 3rd qtr year over year total sales were down 1%+- but that ranged from down 31%+- to up 90%+-
  • Sept months of supply was 3.3 months, ranged from 2.1+- to 7+-
  • Change in median price year over year for Atlanta shows an increase of 35%+- with ranges of -1%+- t0 +230%+-. That’s correct, two MLS areas saw over 100% increases, three saw 75%+- increases – thank you investors.

The impact of institutional investors cannot be overstated. Nor can the fact that many of these 50%+ median price increases are in the sub 100K almost exclusive investor areas. Pull that out and the picture changes.

Home buyers in Atlanta are getting smarter and more savvy everyday, the transparency allowed by the internet is a very good thing. Hopefully, home sellers understand that the 30 second head line is not to be taken literally; we saw many overplay their hand during 2013 and we expect to see overpriced homes hit the market as 2014 opens. Remove the influence of institutional investors on this data and an entirely different – and less robust – picture is painted. And don’t forget that those investors will be dumping inventory as soon as something better comes along.

Success for active and perspective home buyers and home sellers is founded upon preparation. Those educated about the market with a basic understanding of the process will find success; some quicker than others.

Please feel free to contact HMT with any appraisal questions or for a detailed look at the data for any market. CLICK HERE and HERE to see a sample reports by school and CLICK HERE to see one comparing price points in zip codes. Of course the Atlanta Real Estate Market Conditions page is available with data for over 100 area zips.

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Hank Miller, SRA

Hank Miller is an Associate Broker & Certified Appraiser in the north metro Atlanta area. Since 1989, real estate has been his full time profession. Hank´s clients benefit from his appraisal and sales experience; they act upon data, not baseless opinions. He is an outspoken critic of the lax standards in the agent community.

Hank remains an active certified appraiser and completes specialty work for FNMA, lenders and attorneys. He is a well-known blogger and continues to guest write for multiple industry publications as well as national outlets like the WSJ, NYT, RE Magazine, USA Today and others. He is a regular on public Q&A sites on Zillow, Trulia and many others.

Hank consistently ranks in the top 1% of all agents in the metro Atlanta area. He runs the Hank Miller Team and is known as much for his ability as he is for his opinions. He is especially outspoken about the lack of professional standards and expectations in the real estate industry.

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