Hot housing market? No, but Dean Baker bought a house
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We take a closer look in today’s Times at the widely reported uptick in the S&P/Case-Shiller home price index and other recent housing reports.
Some key points:
-- The Case-Shiller 20-city home price index was up 0.5% in May over April, the first increase since 2006. But when seasonally adjusted, the index still dropped from April to May.
-- Monday’s new-home sales spike of 11% in June over May occurred amid one of the softest new-home markets in recorded history. May sales had been so poor that even with the bump, June sales were still the worst for the month since 1982.
-- The rising median price in California is the result of falling prices in the higher-priced segment of the market, which boosted sales of more expensive homes. That raised the overall value of homes sold, and the median, but happened because prices are falling.
-- Dean Baker, the prominent Washington, D.C., housing economist who saw the bubble coming and sold his condo in 2004, recently bought a house. Baker said he thinks the market still has more room to fall, but he wanted to enjoy his backyard this summer and was willing to pay a premium if it comes to that. He said he’s OK with a 5% to 10% further decline in his home value, but ‘if it goes down 20% I’ll be upset.’
-- Peter Y. Hong