Home prices are still on the rise, albeit not as fast as we witnessed earlier this year, according to a story on cnbc.com(1). The report, from numbers compiled from the S&P/Case Shiller composite index real estate home values still on the riseof 20 metropolitan areas rose, but only by 0.9 percent. This just down from a 1.00 percent increase in May. Year over year however, the same index shows that housing prices have increased 12.1 percent, indicating a gradual housing recovery.

 If the numbers were inconsistent, say one month up and another month down, the housing market would still be a meandering statistic, but prices have indeed stabilized and housing seems to have found its sea legs. Yet real estate is still local. All one has to do is compare home values in Detroit with prices in San Francisco.  The single family market, according to the cnbc.com story, may in fact be weakening. Especially in areas that are experiencing double-digit increases.

The report said that increased speculation in single family residences is more prevalent now than it has been in some time, with both new housing being built and contracts placed on them sometimes before the builder has even broken ground. In Las Vegas for example, home prices jumped nearly 25 percent in a 12 month period. San Francisco just witnessed a 24.5 percent gain while to the south, Los Angeles values increased 20.74 percent and San Diego a 19.86 percent year over year rise.

Real estate investors who watch such trends can’t rely on monthly or annual statistics when deciding to invest in an individual unit without knowing the dynamics involved in the area. While home prices are a very important factor, price alone isn’t enough. An investor must know, intimately, where the market has been, why, and the reasons for a successful flip. While reviewing national data from industry experts such as Case Shiller can provide real estate trends, relying on trends in order to make an individual investment decision can lead to disappointing returns.

  1. http://www.cnbc.com/id/100988918