I love the airport. Last week I went there to pick up my Mom and Dad. They were returning from a 10-day Caribbean cruise. I brought my daughter with me because she missed her Grandma and Papa – and the steady stream of tootsie rolls and peppermints she gets whenever my Dad is around. He hands out candy and money to my kids without giving it a second thought. I don’t recall him being that generous when I was growing up.
While we were waiting for my parents to get off the plane I noticed a young man standing alone near the security checkpoint. He kept peering down the terminal hallway. You know that look right? The open-hand-on-your-forehead- standing-on-your tiptoes-with-neck-straining-forward look.
But this guy was different. I could see a twinkle in his eye. It turns out he was waiting for his girlfriend. When she finally made it over to him they promptly kissed and kissed. And kissed again. A hug then followed.
This little scene took me back to the early days with my wife, Linda – pre marriage and pre kids. For a short time I lived in Denver and she lived here in Phoenix. About once a month Linda would fly out to see me and we’d have a similar reunion at the terminal gate. Isn’t that romantic? It makes me feel all warm and fuzzy inside.
I love traveling on airplanes too. There’s something about boarding a plane in a city like Phoenix, and within a few hours, being in a completely different place like Chicago that I find very cool. Plus the view from 30,000 feet is breathtaking. I enjoy seeing the changes in topography and weather patterns during flight.
On Tuesday, the Case-Shiller Home Price Index was released by Standard and Poors. What is that? Well, here’s an explanation in their words:
“The S&P/Case-Shiller National U.S. Home Price Index tracks the value of single-family housing within the United States. The index is a composite of single-family home price indices for the nine U.S. Census divisions and is calculated quarterly.”
What the gang at S&P should really say is that the Case-Shiller Home Price Index is nothing more than a 30,000 foot view of the real estate market. It tracks sales pairings in 20 major U.S. cities and Phoenix is one of them. Problem is that the data is already three months old by the time it’s released to the public. And while you can get a general sense of scenery and movements in the marketplace from this height, it’s impossible to see subtle nuances like you would from the ground.
In their press release from earlier this week here’s what Case-Shiller had to say about Phoenix:
“California is doing better with gains from their low points in Los Angeles, San Diego and San Francisco. At the other end is the Sun Belt – Las Vegas, Miami, Phoenix and Tampa. All four made new lows in December.”
Isn’t that gloomy. If I wasn’t actively investing in real estate here I’d say that sounds downright scary. But what if I told you that just this past weekend we got 9 offers on two houses – and that 4 of the 9 offers were for more than our list price? That certainly doesn’t sound like a market on the way down.
So should we real estate investors care about the Case-Shiller Home Price Index? The answer is yes. I suggest you enjoy it as if you were looking out the window of an airplane. Just remember the more descriptive view is from ground level. Here we can see the sharp lines and jagged edges – where we feel the momentum in the marketplace and go against the grain.