The Housing Recovery is one year old outside the Case Shiller cities
Measured by the FHFA (Federal Housing Finance Administration) Index, housing is flatting out, but prices in Case Shiller cities are still falling. The Case Shiller 20 city index is reasonably accurate, but unrepresentative. House prices in these cities are twice the national level. While the Case Shiller index declined 34% since the peak in 2006, prices outside these regions declined only 14%. FHA data for the 20 cities in the Case Shiller is close to the Case Shiller index. Both indexes are accurate they just measure different geography.
This is summarized below
Heartland prices bottomed out in the first quarter of 2011 and they have been increasing through the first quarter of 2012. In the last three months, Case Shiller cities benefited from reinstatement of higher FHA loan limits which is a one-time pop.
So in the heartland prices are improving but the Case Shiller cites in California and the Northeast (New York and Boston) are falling. The US housing market in recovery will differ sharply by region which it always does. The recovery is good news unless you own property in cities like Los Angeles which is 213% above the start of the bubble and has a substantial decline ahead. Dallas, a Case Shiller city where the prices are 128% above start of the bubble, is similar to a heartland city. Los Angles fell 40% since the peak while Dallas fell 5%. Adjusted for inflation Heartland regions have lost 18% off their value the Case Shiller cities gained 20%. The differences are unsustainable.