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Bob Johnson: This week we are looking at the Case-Shiller 20-city price index of homes, and it's a great indicator of what's happening in the housing market. It has a geographic reach because it covers 20 different cities, and the neat thing about the report is that it compares transactions with houses and then extrapolates between those different houses to figure out exactly what's happening comparing same-home with same-home sales.
It's not like so many other real estate metrics that look at [the average sale prices for a month], because it's not the same home. The mix of homes between the low end and the high end makes a huge difference in that. [The Case-Shiller] is apples-to-apples comparison which is why it's one of the favorite reports that's out there.
Right now, if you look at the data, Case-Shiller, we came down in a big way in the housing recession. But now, since about 2012 we're up about 23% from the bottom. That is a huge number. And then if we turn around and look at the data as a year-over-year percentage change basis, there we've slowed a bit. We're still growing about 13% year over year, but it's been at about that same rate for several months now. We appear to have plateaued.
Now, if you turn around and look at the data for the full year, I'm thinking this year's home price growth by the time we get to December, will be about 5% year over year, still a healthy sustainable growth rate, not the unsustainable 13%, 14% that we saw in 2013.