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The Standard & Poor’s/Case-Shiller home-price index is “the single-most pessimistic but least accurate housing metric out there,” Cramer said during Wednesday’s “Mad Money.”
Of course, that never stops the media from jumping all over it when the latest Case-Shiller numbers hit the wire. Consider the reaction to Tuesday’s report, where the index showed a 1-percent decline in November home prices from the previous month and a 1.6-percent pullback year-over-year. “ Housing Prices, Already Down, Fall Again ,” said The New York Times. “ Falling Home Prices Reveal Limits of Recovery ,” said The Wall Street Journal. But there’s a big reason why the media—and pundits—shouldn’t be making such sweeping generalizations about housing.
The Case-Shiller index measures only 20 U.S. markets. It’s nowhere near as representative as people make it out to be.
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