Case-Shiller

Case-Shiller’s latest monthly report was released today (Feb 24 – the report shows December activity) and showed an annual increase in their pricing index of 8.1% for the month.  Read more in the DBJ.  Picture2

The index gained strength going into the winter 2014/2015 season, which is counter to what typically occurs. During typical winter months, the index remains flat or looses strength, rebounding again in the Spring.  This year, the index bottomed in September, with a 6.2% increase, then increased by 7.2% and 7.5% in October and November.

The 8.1% increase in December was the biggest increase since last May.

The index provides a measure of the increase in home prices in the area.  Applying the indications from the index, if a home valued at $500,000 in December 2013, would be  worth $540,500 in December 2014 – a gain of $40,500.

In simple investment terms, if you had put down 20% on that $500,000 home purchase, your $100,000 initial equity investment would now be worth $140,500 – a return of 40.5% on paper.

Payments on that 2013 $500,000 home would be $1,891/month vs. $2,044/month in 2014 –  a difference of $153/month; and you would need $8,100 more for your down payment.