The index was at 100 in 1985. It had steadily gained throughout 2012, but declines in December and the sharp decline in January wiped out all last year’s advances. Of course, those were the months when uncertainty about Congressional action on the “fiscal cliff” reached a peak and resulted in reinstituting the payroll tax in 2013.
Meanwhile, housing prices, according to S&P’s Case/Shiller Home Price Indices are purring along. Data through November 2012, released yesterday, showed home prices rose in all cities except New York in the 20-City Composite. Phoenix was up 22.8 percent in the twelve months ending in November, its seventh consecutive month of double-digit year-over-year gains.
David Blitzer, Chair of the Index Committee, announced, “Housing is clearly recovering.” He explained some declines in month-over-month numbers as attributable to normal seasonal variations. Housing prices tend to decline in winter. Both the 20-City and 10-City Composites have steadily risen to autumn 2003 levels. Measured from mid-2006 peak levels, however, both composites are still down about 30 percent. In the twelve months ending November 2012, Boston, New York and Chicago had six months of declining prices. It’s possible that distressed property prices have impacted those areas.