Case-Shiller Home Prices Index Down 31.6% from Peak
By Barry Ritholtz - April 28th, 2009, 9:47AM
The good news: February 2009 was the first month since October 2007 where the 10- and 20-City Composites did not post a record annual decline:
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From the peak in mid 2006, the 10-City Composite is down 31.6% and the 20-City Composite is down 30.7%.
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Source:
The Pace of the Decline in Residential Real Estate Prices Slowed in February
S&P/Case-Shiller Home Prices Indices, 2009-04-28 09:00:00
http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_news/2,3,1,2,0,0,0,0,0,0,0,0,0,0,0,0.html
April 28th, 2009 at 9:53 am
Wahooo!!!
We’ve reached terminal velocity!
Now where’es that bottom?
[splat]
April 28th, 2009 at 9:59 am
@Pool:
One thing I can guarantee you is that the people who correctly call[ed] the bottom will [are] be[ing] laughed as heartily by the bears as the bulls laughed at those who called the plunge last year.
April 28th, 2009 at 10:09 am
Is this for real?
“Mr. Barofsky reports that his office “has been informed by the Federal Reserve that it is considering, but has not yet adopted” a plan to replace credit ratings with actual examinations of the underlying loan portfolios. He further reports that Treasury says that “conducting due diligence with respect to the underlying collateral” will be part of its plan for investing in mortgage-backed securities. Imagine that: Trying to find out what they are buying before committing your money.”
http://online.wsj.com/article/SB124087462292661301.html
April 28th, 2009 at 10:14 am
@franklin411:
You are absolutely correct. However, it seems that too many people called this bottom for any bottom caller to be considered a moon-bat this time around. Hence my skepticism about 666 being the final bottom of this bear market. Recall that Richard Russell of the Dow Theory Letters was getting mocked incessantly at the 1974 bottom precisely because he was one of the few to see it.
This time, after a 50+% drop, most people seem to be thinking “It’s merely a flesh wound” that doesn’t need real change to get out of. Denial is not a good way out of problems.
HCF
April 28th, 2009 at 10:18 am
One of these days the bottom-callers will be right and they’ll all tell us about it. Maybe even some of us will be in that group someday. The problem is the number of times they were wrong before being right.
April 28th, 2009 at 10:23 am
consumer confidence is up. Or that’s what the headline says.
Consumer Confidence Soars Unexpectedly in April- AP
Among the running items on this blog, I think this is perhaps an appropriate use of the term UNEXPECTEDLY. Franklin, your optimism is spreading.
I’ve reached my internet quota for the day, and my patience with this market is about exhausted. GM cuts its nose off, and diminishes its future prospects, and the shares go up. I don’t get it, so I’m going to focus on things I can control. Somebody ping me when the carnage starts, deleveraging resumes.
cjc
April 28th, 2009 at 10:24 am
Anyone care to explain how to copy and paste the charts the way Barry does in the post?
April 28th, 2009 at 10:26 am
The Bloomberg anchor almost jumped out of her chair when she reported that news. Of course, when the market was tanking, the uber-bears claimed that consumer confidence was a meaningless indicator. Now, of course, it’s meaningful. I, however, have no clue, although I have a sneaking suspicion that people are simply tired of being downbeat about things (include me in that group) and want to feel better, especially those who still have jobs for the moment. After all, it is spring. Hope spring’s eternal. We’ll see how eternal this is in due time. I can’t see how confidence truly improves if/when unemployment reaches 10%+ in the coming months.
April 28th, 2009 at 10:33 am
This is a bit like yesterday. I would expect the market to dribble down later in the day.
It’s quite bizarre but I suppose this is a “2nd derivative” kind of reaction to the C-S data.
Want to draw attention to the 10-year which hasn’t sold off, at 2.92%.
That is usually a good indication that there might be weakness later in the day.
Also gold is weak so the $ is going to hold in. Not very bullish for stocks.
You have to wonder who is buying here? Hedgies and day traders, I suppose.
Bulltards, as Barry would say. SPX 860 is near term resistance for now.
April 28th, 2009 at 10:38 am
Hey Franklin:
Some of us ‘correctly’ called the bottom over a year ago.
When will we see the bottom?
2012 or later.
The second chart above is all you need to know to predict that.
All the first chart tells you is that the rate of decline has slowed relative to one year ago when prices were already falling ~15% YoY.
Remember that the last national bottom in housing was August 1996…. a full 4 years after the rate of decline bottomed.
April 28th, 2009 at 10:38 am
Sam Zell on yesterday claiming that very few CRE financings between ‘03-’07 above water. I guess buyers of REITS fully expect to be made whole by Uncle Ben & Co. SRS getting clubbed like a baby seal in recent weeks. Glad I trimmed a bit yesterday on the run up. I’m just going to step aside and keep some powder dry until the stress test nonsense passes and we get some quiet in May/summer. That’s when the drip, drip, drip down will occur.
April 28th, 2009 at 10:42 am
@cjcpa
Frankly, I don’t hear people talking so much about how bad the economy is anymore. People know it’s bad, but they aren’t afraid. There’s an overall sense that things are moving towards a positive resolution, and whining about imperfection isn’t going to help anyone. This is a dramatic change from September-Feb. Ordinary people were scared then, and I remember people who care nothing about economics outright asking me what the hell was going on. It seems those days are over.
Anyway, this is interesting. Call it propaganda if you like, but the President has a website where you can quantify how much the Economic Recovery and Reinvestment Act has helped your state:
http://my.barackobama.com/page/content/foundationforchange
Here in California, our stats are:
396,000 jobs created or saved
12,382,000 workers given a tax cut
694,000 children given health care
522,000 students given a tax credit
And some bears wonder why consumer confidence is soaring!
April 28th, 2009 at 10:42 am
@lb – who is buying in here? Day traders and shorts (covering). I think if they banned shorting the market, it would go down a little bit every day for months.
April 28th, 2009 at 10:47 am
the gov is getting exactly what it wants. consumer confidence rising is almost all due to a rising stock market and the gov knows this. the stock market for some reason is the barometer for psychology. this is sick and twisted. i believe the heavy hand of the regime has been a force in the depression rally since it commenced in march. i wonder when i will be polled for my confidence in the current economy?
April 28th, 2009 at 10:53 am
@harold:
You’ve hit the nail on the head. Policy makers are engineering a stock market rise in hopes that the “confidence” it brings will correct economic woes. They really have it backwards. Sustained bull markets are enabled by a combination of fair valuations (barely there, if at all) and improving economic conditions, not the other way around!
HCF
April 28th, 2009 at 10:56 am
Can’t stand CNBS but Bloomberg is making a challenge for the title.
Bloomberg spin: It’s better because it’s the first time we’ve not seen a record MOM change in a while. (tickerforum)
sigh.
~~~
BR: Note they are just repeating what was on the release:
April 28th, 2009 at 10:58 am
@franklin411: I wouldn’t call a university campus “the real world”. Combine that with the bubble that is Southern Cal, and it’s like a 2X ETF in unreality.
April 28th, 2009 at 10:59 am
the gov is getting exactly what it wants. consumer confidence rising is almost all due to a rising stock market and the gov knows this. the stock market for some reason is the barometer for psychology. this is sick and twisted. i believe the heavy hand of the regime has been a force in the depression rally since it commenced in march. i wonder when i will be polled for my confidence in the current economy?
Well really this is the sort of economy we’ve had since the mid 90s – markets giving false information about the state of the economy leading to unjustified confidence, expenditure and resource allocation.
The problem is that the notion that “economic growth = uniformly good” and “economic contraction = uniformly bad” is so deeply entrenched in the nation’s psyche due to political forces that we simply can’t look at the problem in any other way.
The notion of economic structure and financial judgment have been totally lost. Anything is done to promote short-term growth and confidence, which we get… but the cost is the degeneration of underlying economic structure and integrity.
It’s a short-sightedness that is leading to a “3rd world creep” within this nation.
Of course we get to a point where everything is a crisis and has to be dealt with in this manner. At that point the future is lost…
April 28th, 2009 at 11:01 am
I’ve never seen a more bullish chart myself.
April 28th, 2009 at 11:03 am
It’s the same double speak. Just like cutting the rate of growth in the federal budget is called a spending cut.
It’s still falling.
April 28th, 2009 at 11:23 am
Stuart, agree 100%. I almost puked when I read the actual Bloomberg “story”. It reads:
“The S&P/Case-Shiller index’s 18.6 percent decrease compares with a record 19 percent decline the month before. The gauge has fallen every month since January 2007, and year-over-year records began in 2001. ”
Is a .4% difference in the decreases even statistically significant? How is this good news? Even if the rate of decline eases to 10% the major banks and anyone holding a RMBS is fucked if the rate stays there for another 15 months.
Bloomberg’s other big story today is “Stocks go up on Consumer Confidence reports”. Hooray. Unfortunately for consumers, it doesn’t matter how confident they are that BAC is solvent if it really is insolvent. Since no one is telling us the truth, we’re probably better off just assuming the worst.
April 28th, 2009 at 11:39 am
I saw this interview the other day with Janet Tavakoli. It is making its round through the net. A very good interview, rather long, but from it I recall two really good expressions that i had not heard of for some time. When she mentioned them they fit so well to so much. “interested men” and “detached skepticism” .
April 28th, 2009 at 11:41 am
BR: did you get a hold of James? Just wondering. Cheers.
April 28th, 2009 at 11:42 am
I think most everyone here, cept maybe Franklin, will love this guy. Don’t bother with the article, watch the video.
http://www.cnbc.com/id/30447441
April 28th, 2009 at 11:51 am
“Bloomberg spin: It’s better because it’s the first time we’ve not seen a record MOM change in a while. ”
I mean, I wouldn’t go so far as to say its bullish per se, but there’s no denying the fact that it WAS the first time the YOY decline was less negative.
April 28th, 2009 at 11:51 am
we’ll finally hit bottom when the levels drop to or below the August 1999.
April 28th, 2009 at 11:52 am
It’s helpful to look at this at the consumer level. Maybe suggest that to MSM?
It means that a homeowner whose house was valued at $250,000 a year ago just lost ~$46,500 (-18.6%) in value/equity. One good example of a tangible substance, the ingestion of which has a negative impact, is dogshit.
Through the joys of decelerating loss in value, only an additional $18,300 will be lost next year, assuming a mere 9% YoY loss from 2009 – 10. So turn those frowns upside down, clowns! Next year you’ll only be eating half a dogshit sandwich!
‘Cause that’s how we roll with our junior high math skillz.
April 28th, 2009 at 11:57 am
@Mike in Nola: Great video clip.
April 28th, 2009 at 12:03 pm
@Mike in Nola: Great clip. Thanks for that.
Did Hendry just call Leftback a monkey???
April 28th, 2009 at 12:03 pm
@franklin THanks for the link to “Foundation for Change”.
Just another BO propaganda site. It sure does pump out some big numbers. Unfortunately they’re projections. The implied job numbers are Phonied up. They have no real measures. and won’t. Even though doing it would be straightforward.
April 28th, 2009 at 12:08 pm
As I understand it this index does not do any kind of inflation correction so it should be expected to have a slow continuos increase. When I take a ruler to the screen and look for where the index would be expected to be now, if not for the bubble, I get to about 130-135. We are at 155 so yes there is still a little ways to go, but we have also come quite a bit down from 225.
April 28th, 2009 at 12:09 pm
Franklin411
Arlen Specter is joining your team. He’s going to become a “D”.
April 28th, 2009 at 12:10 pm
Watch this interview with David Simon, co-creator of “The Wire” and he explains quite clearly how public officials (and corporate execs) mis-use/manipulate statistics to create the reality they want to convey to the public, namely the appearance of doing something positive. I’m suuuurree the O administration is above doing this kind of thing though, right franklin?
http://www.pbs.org/moyers/journal/04172009/watch.html
April 28th, 2009 at 12:10 pm
Unless there is a truly astonishing reflationary effort, housing prices could go all the way back to early 1990s levels, especially if this bubble observes the “undershoot” phenomenon that is common for speculative bubbles. There is already some evidence in the California market that this may be occurring.
According to CR, there are houses on sale for <$100K in the Inland Empire. You could easily see that happening in places like Tucson and Vegas. Of course Detroit, Cleveland, are already there. If that is general then the optimistic forecasts for homeowners and banks are indeed .. well.. ” less stressful “.
I wonder if people in Detroit are feeling an increase in Consumer Confidence? I am guessing not.
@Transor: Leftback is a major rally monkey
but not at market tops…
April 28th, 2009 at 12:13 pm
And this is the headline in our paper today:
“U.S. consumer confidence soars in April”
April 28th, 2009 at 12:13 pm
@DL: Besides the uber-important item of taking on the Patriots, Roger Goodell and the NFL (and losing) on behalf of Comcast and his Eagles in recent years, what exactly has Arlen Spector accomplished of any importance in the Senate?
April 28th, 2009 at 12:14 pm
Besides this is a load of tosh. Hardly any houses sell in February across most of the country.
The Spring selling season is upon us in earnest in NYC and Connecticut and homes are selling like….
Well, actually they’re not selling. But realtards are PUTTING OUT MORE BALLOONS.
April 28th, 2009 at 12:19 pm
@leftback: Anecdotally, they’re not selling here in my neighborhood either this spring “selling” season. Far more are languishing on the market than have “sold” signs. Green shoots indeed.
April 28th, 2009 at 12:24 pm
I recall Arlen gave Anita Hill a significant cross examination. (if IRC)
April 28th, 2009 at 12:28 pm
@DL
Thanks for the heads up…I’m late for class, but Spector will still have to vote for EFCA if he expects to be reelected.
April 28th, 2009 at 12:46 pm
[...] Housing prices continue to fall Jump to Comments Larry Kudlow said housing hit a bottom in 2005: Case-Shiller Home Prices Index Down 31.6% from Peak [...]
April 28th, 2009 at 12:58 pm
Re: Hugh Hendry interview
It occured to me that the question may have been a supplied by some brokerage house. It would have taken a bit of work to come up with the % figures claimed in the question.
I remember last year someone on CNBC interviewed David Einhorn. It was a normal morning show interview, but the interviewer was primed like a DA for cross examination and you just knew some of the questions were supplied by Lehmann or whomever he had recently unmasked as insolvent.
April 28th, 2009 at 1:01 pm
OT: (with a properly-positioned tin-foil hat on my head)
There’s something quite strange lately about the stock markets: Down every morning for an hour or two that looks like might turn into a rout, then the fall reverses course to make it back to even, or fairly close, by the close.
Am I seeing a pattern where there is none? Or is the Fed also printing dollars to juice the stock markets? Or is it “encouraging” (like it “encouraged” Ken Lewis to not tell his shareholders about Merrill’s stinky assets) entities it now more or less has ownership stakes in, to buy on the dips?
I never really ascribed to the PPT, but this seems more nefarious, like the PPT has become the volatility reduction team. Are things really as benign as the market seems to be indicating?
Putting my tin-foil hat aside, you can never underestimate the willingness of government to take any measures it can to maintain its grip on power, so suspicion and skepticism are always warranted, and especially now since the Feds have basically nationalized about half of the American economy.
April 28th, 2009 at 1:14 pm
@Curmudgeon: I’ve noticed the very same pattern (futures down early, but reverse course once market opens, big pump at end of each day). It’s not your imagination. Doesn’t seem natural for this to happen virtually every day, or is it me?
April 28th, 2009 at 1:23 pm
Curm and Mann:
Supposedly, the market is mainly moved by the big houses. (they should all be in the big house). My guess that the pattern is the result of some trading strategy by some of the big boys.
April 28th, 2009 at 1:31 pm
The past few weeks the daily movements have been very narrow. Almost like 2006.
Closed out a few SPY puts this morning that I opened Friday when the S&P hit 870. Got even more than I thought I would at the opening.
We are stuck right now, not enough news to move anything one direction or another. A lot of gaming the system seems to be going on, or attempts to game the gamer. I feel that its going to take a big percentage gap move 5% or more to break out of this.
April 28th, 2009 at 1:32 pm
@Mike & Curm: Tyler Durden at Zero Hedge has documented this fact lately in that Goldman and other big houses seem to be controlling a market that has decreasing amounts of real liquidity in it lately.
Maybe the big O was giving off a big hint to all of us when he implicitly endorsed buying the market literally a day or two before the March 9 lows because he knew what was coming? Just a thought…sounds crazy, I know, but does it really when one thinks about what’s transpired since then?
April 28th, 2009 at 1:57 pm
IMO the most dangerous political constituency right now are minor millionaire boomers whose retirement portfolios crapped out in the fall. They’ll be placated if their investments return to a certain level and they won’t ask too many questions.
It’s a highly educated/sophisticated group and they’ll stir the pot if they feel completely shafted.
Does it mean inheritance taxes will go through the roof or will they be proactive over the next decade(s) to also protect their kids/heirs?
April 28th, 2009 at 2:04 pm
“Maybe the big O was giving off a big hint to all of us when he implicitly endorsed buying the market literally a day or two before the March 9 lows because he knew what was coming? Just a thought…sounds crazy, I know, but does it really when one thinks about what’s transpired since then?”
It really isn’t crazy at all….in the bond markets, they telegraphed the plan to buy MBS’s months before it actually was announced as Fed policy, by telling the big banks to gear up for the refi’s, etc…all you have to do in the bond markets is listen to Bill Gross at Pimco–he loaded up on MBS right before the announced purchase. Pimco is sorta the Goldman Sachs of bond managers, knowing what the Fed is about to do– in my view, because it tells the Fed what to do.
In fact, Gross Bill just said the Fed will have to buy more than $300 billion in Treasuries for its QE strategy. You can virtually bank (no pun intended) on it that they will:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a9BymKxDE0_o
Now if we could figure out who is behind the stock markets. GS, perhaps?
April 28th, 2009 at 2:43 pm
Curm: I’ve read somewhere, maybe Mish, that they will have to buy $300B a quarter, but they are not about to tell us that up front.