S&P/Case-Shiller home price indices indicate the government-sponsored real estate bounce has ended

[Amerigo Vespucci]

Case-Shiller: January's housing prices indicate end of real estate bounce

Housing prices fell from December to January, according to the S&P/Case-Shiller home price indices. That indicates the government sponsored housing bounce has ended.

http://www.csmonitor.com/Money/Paper-Economy/2010/0401/Case-Shiller-January-s-housing-prices-indicate-end-of-real-estate-bounce

By SoldAtTheTop, Guest blogger / April 1, 2010



Tuesday's release of the S&P/Case-Shiller (CSI) home price indices for January 2010 (browse the dashboard) reported that the non-seasonally adjusted Composite-10 price index declined slightly since December further indicating that the government sponsored housing bounce has drawn to a close.

It’s important to remember that the CSI data is lagged by two months and that today’s results represent the trend of prices paid from home sales closed between November-January of 2009.

Now that the strongest selling months have been reported, look for all remaining CSI releases until early spring to continue to indicate notable price weakness coming from typical seasonal declines as well as extra-seasonal declines as a result of reduced demand from activity that was “stimulated” forward into the summer and early fall by the tax sham.

Also, looking at the 1990s-era comparison charts below its obvious that even after the main downward thrust has been reached, the housing markets have a long tough slog ahead with the ultimate bottom likely many years out…. Or if we are currently experiencing the Japanese model… decades out.

Further, is important to remember that the 90s housing recovery played out against the backdrop of a truly unique period of growth in the wider economy fueled primarily by novel and ubiquitous technological change (cell phones, internet, personal computers, telecommunications, etc).

Today, we may not be so lucky.

[jody]

1. Doesn't matter because I have it on good authority that recovery is just around the corner. n/t

[WhiteTara]

2. let's hope we actually create a green industry

of sustainable energy and better energy efficient housing remodels. Not to mention the green transportation industry (not electric cars.)

[FarCenter]

3. Look at all 20 markets

In the seasonally adjusted Case-Shiller report, the following metro areas were up:

Phoenix, LA, San Diego, San Francisco, Denver, Washington, Tampa, Boston, Detroit, Minneapolis, Las Vegas, Cleveland

The following metro areas were down:

Miami, Atlanta, Chicago, Charlotte, New York, Portland, Dallas, Seattle.

If you plot the index per city over the last year, many of the areas are off the bottom made last Spring/Summer, and are relatively flat for the last few months.

Current prices range from 5% below the peak in Dallas to 56% below the peak in Las Vegas. Of course, the liberalization of gambling laws in other states has pretty much eliminated Las Vegas' reason to exist.

[Greyhound]

6. Seasonally adjusted and limiting the view to the last year.

Even the positive spinners can't make this more than laughable.
:rofl:

[FarCenter]

10. For the non-seasonally adjusted results...

In the non-seasonally adjusted Case-Shiller report, the following metro areas were up:

LA, San Diego.

The rest of the metro areas were down.

But the reason for making seasonal adjustments is that multi-year records show that the prices trend down between December and January. If you look at the un-adjusted data over the last ten years, prices tend to rise during March - September and fall during October - February. The demand for homes is seasonal, and prices are partly governed by demand.

[amborin]

4. ny times article said it's grim in most markets and will remain very grim

[Greyhound]

5. They're fighting the tide with a bucket.

The housing market was artificially inflated through financial shenanigans for a few years of profit-taking by The People That Matter and there is nothing that can stop the return to equilibrium.

House prices are to high or wages are too low, period.

[SoCalDem]

7. Both

wages too low AND prices still too high.

and the conundrum many face now is this:

competition from "investors" with cash, who swoop in to buy up the best bargains (they have ALWAYS done this)

and banks are unwilling to lend to most people now (unless they have 20-30% down)

Many would-be first-time buyers cannot find a home, even in a depressed market, because they lack the upfront money necessary (it's been this way forever, until the EZ-Credit years), and because banks are back to being careful with lending.

Super low prices create a bidding-war scenario for the "best" properties, which does not benefit the people vacating the home, so banks are more willing to sit on repos, in hopes that investors will end up paying more for these sought-after places, but in the process, many people who would actually make good home-buyers get priced out of their capability in a New York Minute.

[Greyhound]

8. Yes, moving both would be the best, but rising wages seems highly unlikely considering

how thoroughly indoctrinated we are now.

This whole mess goes straight back the Raygun loot-fest that, details aside, created this ever-growing ocean of liquidity.

[Zynx]

9. Prices will probably be essentially stagnant for the next four years or so.

That's a very typical pattern after a bust such as this. The fundamentals don't support a dramatic reduction in prices, but they certainly do not support increases either.