Case Shiller Price Index - October 2009

From Case Shiller's Press Release:

“The turn-around in home prices seen in the Spring and Summer has faded with only seven of the 20 cities seeing month-to-month gains, although all 20 continue to show improvements on a year-over-year basis. All in all, this report should be described as flat.” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s.
...
As of October 2009, average home prices across the United States are at similar levels to where they were in the autumn of 2003. From the peak in the second quarter of 2006 through the trough in April 2009, the 10-City Composite is down 33.5% and the 20-City Composite is down 32.6%. With the relative improvement of the past few months, the peak-to-date figures through October 2009 are -29.8% and -29.0%, respectively.

Prices declined in 12 of the 20 Case-Shiller metropolitan areas, and were flat in New York.

Case-Shiller House Price Graphs for October (Calculated Risk Blog)

In the Washington, DC area prices were fell -.4% (not seasonally adjusted) in October compared to September; Annually prices have declined -2.8%. I expect small price declines during over the winter months in the DC area.

Get to know your blogger

I'm on vacation this week. David says he'll post to the blog while I'm gone. In the meantime, get to know your blogger through Wikipedia user boxes. Click on the image to see the full-sized version.

Updated housing bubble graph

For those who are interested, I have finally gotten around to updating my housing bubble graphs. The national graph now has a new feature: pre-bubble trend lines.

Click on the graph to view the full-sized version.

David Lereah Launches New Real Estate Blog

David Lereah launches a new blog called Real Estate Economy Watch.

Seeking Alpha has this to say:

Maybe not… but it appears that Lereah has launched a new venture… let’s call it a blog… with both an ironic title and a decidedly more realistic un-spun outlook.

“Real Estate Economy Watch” is effectively a blog that hosts daily commentary on the housing market, tracks market data, and even specifically follows the course the “housing crisis”.


The title is ironic because it is reminiscent of “David Lereah Watch” a popular blog that relentlessly pounded Lereah during the heyday of the bubble crescendo.

The content, on the other hand, bears an unrecognizable skeptical edge.

Solid name for his site. I hope that it also contains solid content. Of course he cannot be trusted.

Merry Christmas

Happy Christmas to all, and to all a good night!

Bernanke criticized for ignoring housing bubble

Kevin Drum criticizes Fed Chairman Ben Bernanke for being complacent about the growing housing bubble. Nobel laureate Paul Krugman follows suit.

NAHB: Senate health care bill targets home builders

The National Association of Home Builders isn't happy with the Senate's version of the health care reform bill:

Home builders say they are unfairly targeted in the sweeping Senate health-care legislation that could mean coverage for millions of Americans.

"In their rush to pass massive health care reform before Christmas, Senate Democrats included a last-minute provision overtly targeting the construction industry, including home builders," the National Association of Home Builders said in an email alert to its 200,000 members Monday. "In order to find the 60 votes needed to pass health-care reform, a provision was slipped into the health-care bill to exclude the construction industry from the small business health-care exemption contained in the bill."

Employers with more than 50 employees would be required to offer insurance or pay a fine of up to $750 per employee if any employee obtains federal subsidies for coverage. But the builder group says the bill singles out the construction industry by "only giving construction firms an exemption from the bill's employer mandates if a firm employs less than five people. Every other industry is granted an exemption if they have fewer than 50 employees."

Home prices falling again?

This comes from Calculated Risk:

Earlier today I mentioned that the Fed started using First American CoreLogic's LoanPerformance House Price Index last year for the Flow of Funds report.

And also that LoanPerformance announced today that house prices fell 0.7% in October.

Since most people have been following Case-Shiller, here is a graph of the LoanPerformance index (with and without foreclosures) and the Case-Shiller Composite 20 index.

The LoanPerformance HPI with foreclosures is the red line, the LoanPerformance HPI without foreclosures is the blue line, and the Case-Shiller 20-city index is the green line. (The Case-Shiller index includes foreclosures.) Notice that both LoanPerformance indices show falling prices again, while the Case-Shiller index is showing slowing price increases. Click on the graph to see the full-sized version.

Consider this a Christmas present for bubbleheads.

Links

Morgan Stanley is immoral. (Just in case you didn't already know.)

Finally, a stimulus bill I can support. But why does Congress feel the need to tell states how to spend the money? Why not just give money to the states and let those closer to the ground level make the spending decisions. Does Washington, D.C. really know what's good for Wyoming better than the Wyoming state legislature does?

Bearish housing predictions

Predictions from Trulia CEO Pete Flint:

Next year "government interventions will start to disappear, shadow inventory will hit the market and mortgage rates will start to rise" to around 6 percent from under 5 percent, he said. "We're in a false state of stability."

Shadow inventory includes houses that banks now hold but have yet to put up for sale.

Double-digit unemployment will push more owners into foreclosure, further destabilizing the housing market and pressing prices down another 5 to 10 percent, said Flint.

Predictions from RealtyTrac:

Foreclosures could escalate to 4 million in 2010, RealtyTrac Senior Vice president Rick Sharga said.

"Unemployment, negative equity are driving factors, as is credit availability," he said. "We don't believe we will get back to normal levels of foreclosure activity on a month-to-month basis until probably the end of 2012, and we will still be going through the shadow inventory well into 2013."

Banks will place the unsold homes on the market at a measured pace to thwart prices on all homes from falling off a cliff anew, he said.