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Bloomberg spins falling Case Shiller numbers as a positive trend
This morning, S&P/Case-Shiller released their data for February sales and resales of the same homes. Bloomberg News spins these numbers as a positive sign (Oil rises as Case-Shiller report shows improvement). Their story begins:
The actual data is graphed below (after dividing by the CPI to subtract inflation):
About 1 year ago, we wrote a commentary for the American Thinker called House Prices in Free Fall. We predicted that house prices would continue to fall. Specifically:
At that time, the latest real Case-Shiller house prices index (seasonally adjusted) was from January 2011. That value was 137.10. In February 2012 it was 127.34. That's a fall off of 7.1% over 13 months, a 6.6% rate of fall per year. We are precisely on-track with our prediction that houses will lose about a quarter of their real value over 4 years.
Bloomberg's numbers are essentially the same as ours. The main difference is that they ignore inflation which was 2.87% from February 2011 to February 2012.
Bloomberg sees the curve as flattening out because the fall in house prices from January to February 2011 was slightly greater then the fall from January to February 2012. But when I look at the curve, I see a relatively straight line. What do you see?
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