Comments on: Case Shiller Index Falls 19%

By: ben22

ben22 — Wed, 01 Apr 2009 02:33:14 +0000

RE: Reset schedule.

Barry had a post with a link to the Option ARM reset schedule maybe a month or so back. Subprime is basically over but it’s Option ARM and ALT A next. big time resets in those in 2010 and 2011.

By: matthew_t_hummel

matthew_t_hummel — Wed, 01 Apr 2009 02:18:53 +0000

one word – Doh!

By: Steve Barry

Steve Barry — Wed, 01 Apr 2009 00:20:36 +0000

Mike:

Great link…the reset schedule from Hussman also supports a post-2015 bottom. I believe that has terrible ramifications as more and more home become under water. This is a vicious feedback loop.

By: teraflop

teraflop — Tue, 31 Mar 2009 23:31:51 +0000

Will T, thanks for your comment. I just picked up a 40+ year-old house as primary residence in the same area as that of your condo locale for 87% of original list price. I don’t consider it a bargain but sought a solid “buy & hold” non-PMI/escrow market (i.e., non-exurbia) plus below less liquid prices (1MM+) in this Texas market.

I consider it a “hunker down” play though I think Dallas & Houston will be awash with painful retail RE losses once some home sales volume dissipates after non-Texans finish invading, er, escaping, er moving here. Assuming energy languishes like it did in 2001-2004 or shudder, worse.

By: Mike in Nola

Mike in Nola — Tue, 31 Mar 2009 23:31:43 +0000

In case anyone is still observing this thread, some graphics from Hussman are interesting. We may be past the subprime resets, but tha liar loans, etc are still to come. Scroll about 2/3 of the way down past the rant and to the topic “The Danger of Inaction”.

http://hussmanfunds.com/wmc/wmc090330.htm

By: Steve Barry

Steve Barry — Tue, 31 Mar 2009 21:33:46 +0000

Extrapolate that second chart (I did a similar thing on the 100 year chart awhile back) and housing bottoms around 2015 if you are lucky. It is following the path projected to a tee.

By: flipspiceland

flipspiceland — Tue, 31 Mar 2009 20:34:40 +0000

In Banff, that is called a triple Black Diamond ’slope’.

Or Upper Gravel face.

By: John Reeder

John Reeder — Tue, 31 Mar 2009 20:13:59 +0000

I wish that Case-Shiller didn’t lag by two months. It’s almost like reading stories about “Holiday shoppers not enough to save retailers”. I’m sure their methodology is great, but I just wish they would come out with fresher data.

It seems like a title company could probably provide better data on home sales than Case/Shiller does.

The other thing is that prices do not encompass the new home market. You have to consider volume, and if anybody is really interested in seeing where the market is going, they should really be looking at volume. That will tell you whether the bottom is in sight.

Oh, one more thing. There is really no national home market. Individual regions have housing markets. But the regions canibalize the markets of other regions. When California got hot, a lot of people went to Texas. The outflow of population hurt California and helped Texas. That’s not going to show up in the Index, but does matter.

I have some additional thoughts on my site.

http://realpropertyalpha.com/2009/03/31/ritholtz-on-caseshiller/

By: ben22

ben22 — Tue, 31 Mar 2009 20:07:02 +0000

I hate looking at this chart every month. Where I live, prices are not coming down too much, certainly not 19%. Wish they would so I could upgrade.

By: Mike in Nola

Mike in Nola — Tue, 31 Mar 2009 19:55:45 +0000

An entertaining comment on a Houston real estate blog:

http://swamplot.com/waiting-for-greenwood-king-to-drop/2009-03-31/#comments

Houston isn’t on the Index, apparently because the law here allows parties to hide sale prices to baffle the assessors. Don’t wanna have to pay for all these services and excellent roads.