CNN Money Makes Big Deal Out of Old News
In yet another case of the numbers being irrelevant to the headlines, CNN Money announces, Major home markets’ slump continues.
A closer look reveals these are November numbers which indeed didn’t turn out so well. Further, the Case Shiller index represents only 20 of the country’s largest cities. Obviously the numbers have been bad on the coasts, which happen to contain many of the largest cities.
Finally, the numbers presented in this particular study reveal the methodology for the study itself may be in question:
According to Shiller, not only are the futures too thinly traded still to be a very accurate guide to market sentiment but there is also a risk premium to be taken into account; at this point, more traders are interested in protecting themselves against loss than are interested in buying into a growing market.
Why am I questioning this report? Because more recent news, namely December’s sales, both new homes and existing homes, show a market improvement in many cities across the country. Which report do you think better reflects the health of the housing market…November, or December?
I thought the purpose of the press was to inform and provide insight to complicated issues. This article provides the information, but the headline only serves to incite fear and concern.