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Case Shiller home prices go up ... and down
Tuesday, January 26, 2010
You can make whatever case you want about the direction of U.S. property values given the latest data for the S&P Case-Shiller Home Price Index. As shown below, based on seasonally adjusted data (which only recently started to be reported), home prices rose 0.2 percent in November, but, the non-seasonally adjusted result was a decline of 0.2 percent.
[Note: This is an animated .gif - if you don't see it moving, it's not my fault.]What continues to be odd about this data series is that the seasonally adjusted data doesn't seem to be seasonally adjusted very well at all.
8 comments:
This is just the beginning --- another ten percent down this year is my guess.
Let's hope so. The bottom 60% are out of the housing market at today's prices. Better yet, they should be allowed to build $70,000 homes for themselves. The median price of $200,000 is just too much.
The country will never get out of excessive debt unless the prices come down to the affordable range.
The big test comes when the Fed stops buying MBSes in March and the current homebuyer tax credit runs out in April. They'll both probably be extended after a few more months of price declines in this index.
I suspect there will be further downward pressure on prices.
Until the economy can improve based on private sector investment vs government dole outs, it is hard to see demand for housing increasing.
@TedS. QE is not going to end. All the interested parties need higher nominal asset prices. Housing prices probably decline slowly as other prices (food, energy, taxes) rise.
Anonymous at January 26, 2010 9:16 AM, I agree. But are we there yet? Look at the data that is referenced in Bubblemeter Blog, and the median price is close to the norm.
Go to:
http://mysite.verizon.net/vzeqrguz/housingbubble/
Scroll down the page to the link above and you'll see data for major cities. Perhaps another 10% drop and we'll be at the norm. Perhaps houses at the low end will remain steady, but the middle-high and high range homes will correct in order to bring down the median price.
Housing boosters have forecast turnarounds repeatedly since the market peaked in 2006, only to be proven wrong by plunging prices. And skeptics say they’re wrong again now. They argue that a deeply indebted consumer, a weak job market, expiring incentives and rising foreclosures spell a quick end to any housing rebound.
Read More: http://housingnewsusa.blogspot.com
Housing values are going to continue to get worse as long as people continue to lose their jobs. It isn't just the 10% unemployment rate, its also the underemployment number that is concerning. Even people with jobs are hesitant to buy right now, I'm one of them. It's obviously difficult to predict where housing is headed but given the choice between up 5% or down 15% over the coming year, I'll take down 15%.
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