Yesterday I talked about how difficult it is to settle on reliable figures for housing costs in large urban areas. Here’s another example, this time focusing on New York City. There are, at a minimum, four widely-used housing indexes:
- Case-Shiller home price index
- Case-Shiller condo price index
- BLS inflation of primary residence index (includes Newark and Jersey City)
- HUD 50th percentile rent estimate
Here they all are on a single chart. The dashed black line represents overall inflation:
If you look just at home prices, there’s been no rise at all. Compared to inflation, home prices fell in the 90s, skyrocketed in the aughts, and ended up flat. However, if you look at the inflation rate for primary residences, which includes all forms of housing, it’s now about 20 percent higher than overall inflation. Ditto for the HUD estimate of average rents. Then there’s the Case-Shiller condo index, which is currently about 40 percent above the overall inflation rate compared to where it was in 1987.
But what if you don’t care about long-term history? You just want to see what housing prices look like over the past few years. Here you go:
This time, both the BLS inflation index and the Case-Shiller housing index suggest that housing prices have decreased over the past decade. Apartments and condos, conversely, have risen, but are still only about 5 percent more expensive than they were in 2010.
So which one of these best represents the price of housing in New York City? Or are they all wrong?
