Monthly Case Shiller
This should be the last of the Seasonal adjustment discussions, but note the difference between the two data runs: Non Seasonally Adjusted and Seasonally Adjusted .
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click for larger chart
via Bianco Research
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Media coverage was mostly gushing:
Front Page WSJ: Home Prices Rise Across U.S. Home prices in major U.S. cities registered the first monthly gain in nearly three years, according to a new report that provided fresh evidence that the severe U.S. housing downturn could be easing. Standard & Poor’s Case-Shiller index, which tracks home prices in 20 metropolitan areas, rose 0.5% for the three-month period ending in May, compared with the three months ending in April. It marked the index’s first increase after 34 straight months of decline, and came after a variety of housing indicators has shown glimmers of hope for the past several months
Front Page NYT: Advertise on NYTimes.comRecovery Signs in Housing Market Stir Some Hope
After a plunge lasting three years, houses have finally become cheap enough to lure buyers. That, in turn, is stabilizing prices, generating hope that the real estate market is beginning to recover. Eight cities, including Chicago, Cleveland, Denver and San Francisco, showed price increases in May, up from four in April and one in March, according to data released Tuesday. Two other cities, Charlotte, N.C., and New York, were flat.
Bloomberg.com - U.S. Home Prices Rise for First Time in Three Years
Home prices posted their first monthly gain in three years in May, a gauge of values in 20 major U.S. cities showed, reinforcing signs of stabilization in a market hammered by the worst slump since the 1930s. The S&P/Case-Shiller home-price index rose 0.5 percent from April, the first monthly gain since July 2006 and biggest since May of that year, the group said today in New York. The measure was down 17.1 percent from May 2008, less than forecast and the smallest year-over-year drop in nine months.
CNN/Money – Home prices up for 1st time in 3 years
Index of 20 major cities rises on a monthly basis for the first time since July 2006, hinting that the worst of the declines may be over. The value of U.S. homes grew on a monthly basis in May for the first time in nearly three years, according to 20-city index released Tuesday. The month-over-month increase was 0.5%, according to the report from financial data company Standard & Poor’s and economists Case-Shiller. It was the first increase in the monthly index since July 2006.
Reuters - Home prices up for first time in three years
U.S. single-family home prices rose in May from April, the first monthly increase in nearly three years, suggesting prices may be stabilizing, according to Standard & Poor’s/Case Shiller home price indexes on Tuesday.
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July 29th, 2009 at 12:03 pm
Excerpt from the cash for clunkers official site:
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In addition to this credit, will I get the full value of my trade-in vehicle?
No. The law requires your trade-in vehicle to be destroyed. Therefore, the value you negotiate with the dealer for your trade-in vehicle is not likely to exceed its scrap value. The law requires the dealer to disclose to you an estimate of the scrap value of your trade-in vehicle.
********************************
It’s basically a guaranteed trade in program. If your car is absolute junk, you might get $3500 or $4500 from Uncle Stupid for It. I didn’t realize that until today. It’s not an add-on deal.
July 29th, 2009 at 12:10 pm
On the other hand, the CS data might be a green shoot, in the form of a possible beginning of a bottoming process. Having said that, I just found out my bank was ordered to raise capital a while ago and might be taken over this fall if they don’t turn things around. Their NFP commercial loan portfolio is staggering.
July 29th, 2009 at 12:12 pm
I meant their non performing commercial loan portfolio is staggering. I don’t know where I came up with NFP.
July 29th, 2009 at 12:13 pm
I think that a graph showing the cumulative change in the index is a lot easier to understand at a glance, which is about all many give it. Many would look at this and not have a clue as to how far prices have fallen as that would essential be the integral of the function. They would just see that it’s back near zero or positive.
July 29th, 2009 at 12:30 pm
$1.25 trillion dollars being thrown at housing prices, of which about half is gone, is all you need to know about price trends. They should continue to look less bad until the last quarter of this year–roughly when the $1.25 trillion is exhausted (unless, of course, Uncle Ben changes his mind about his pixel presses), after which their regularly-scheduled crash will reappear.
July 29th, 2009 at 12:37 pm
Here is my profound analysis — At some point – housing prices will stabilize/stop going down/ flatline/vbottom – who knows which.
Maybe this summer. Maybe not.
Now is a better time to buy an investment property than 2 years ago – if you can positive cash flow the property.
July 29th, 2009 at 12:41 pm
house prices will keep going down till they start to be in balance with incomes. at this time, thats a race to the bottom since incomes are back to 2000 or so, and houses aren’t quite that far back. yet. problem is by the time they to 2000, incomes will be back to 1990s. so its going to be a long way down
July 29th, 2009 at 12:46 pm
Damn BR…
You need to look at that chart with red&blue 3-D glasses…
July 29th, 2009 at 12:48 pm
How’s this for a theory???
House prices will continue to go down until Goldman Sachs decides they’re cheap and wants to underwrite the entire market…
Got any better ideas?
July 29th, 2009 at 1:02 pm
Once again, people are truly desperate for some good news and willing to delude themselves if that’s what it takesm(denial is strong). Some even believe in the self fulfilling psychology aspect of it, not understanding the ill effects that come from not dealing with reality. And so it continues.
July 29th, 2009 at 1:06 pm
dead hobo Says:
July 29th, 2009 at 12:12 pm
I meant their non performing commercial loan portfolio is staggering. I don’t know where I came up with NFP.
more
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Now I know … NFP = Not For Profit (wrong initials onthe mind) … Sort of true, only not by choice, I presume.
July 29th, 2009 at 1:13 pm
Barry -
Great job on Dylan’s show today. I loved it when you mentioned “newlyweds who can’t get into houses.” I’m thinking, hey, that’s me! Actually, my wife and I probably could afford a house, but
1) We can do basic math and
2) We’re not f**king insane enough to…
So many people seem to miss that in the boom, everyone who could afford to buy a house bought one, and everyone who could NOT afford a house STILL bought one. Now that there is a correction, who buys the houses: immigrants and young families. Neither group can truly afford home yet in many places (including Boston, where I’m at). Almost no one points out who the marginal buyer in this market is. I applaud you for doing so!
HCF
July 29th, 2009 at 1:34 pm
Just another MSM shot at green shoots for real estate.
http://www.nytimes.com/2009/07/29/business/economy/29housing.html?_r=1&th&emc=th
Kind of fascinating see the different spins being placed on things in a matter of a few hours I went from Mr Mortgage’s detailed, thorough report that painted an extremely gruesome picture, to this NYT article.
Suppose it’s just another example of trying to pump as much as possible before it begins circling the drain.
July 29th, 2009 at 1:37 pm
Add FT to the list of newspapers running this story on their front page:
“US house prices rose for the first time in three years in May, adding to evidence that the stricken residential real estate market is stabilizing.”
July 29th, 2009 at 1:38 pm
This one I like a lot because it expresses some simple truths about who to believe. And adds the historical perspective of how Black Monday, 1987 was caused by program trading all the insiders lauded.
http://www.nytimes.com/2009/07/29/opinion/29wilmott.html?th&emc=th
This time I think it will be different. The market might tank. But they seem to be pretty good at sucking their profit out of the life blood of America.
Kind of like the perfect parasite. Bleed the victim dry without killing it, and limit the parasite population to the select few.
July 29th, 2009 at 2:07 pm
I can walk less than 2 miles from my front door to no less than 18 homes listed over $2 million.. and most of those are priced over $5 and there are a few more under $2.. this is a staggering number of over priced homes in a small sample area of southern california.. and the buyers are to come from where? on what income?
July 29th, 2009 at 2:30 pm
karen-
from where? foreigh nationals
from what income? won’t matter- all cash deals
the State of California should be putting out the welcome mat – not to illegals as it has been doing- but to foreign nationals with CASH$$$$
July 29th, 2009 at 2:39 pm
I think that the obsession Americans (and people who immigrate to US) have with “owning” a house have reached the equivalent level of meth addiction.
July 29th, 2009 at 2:59 pm
@karen
Don’t worry karen…
In a couple of years, they’ll start converting all those houses into 4 plexes…
So 18 x 4 = 72 family (attached) homes…
Of course, $500,000 will STILL be too much to pay for a house, so each 4 plex will house 3 mexican families…
72 x 3 = 216
It’ll be a nice neighborhood…Pinatas for everyone!