Comments on: S&P/CaseShiller home price index

By: owen b

owen b — Thu, 30 Jul 2009 11:05:46 +0000

VERY interesting piece on the ECRI’s site about their Leading Home Price Index.

Charts here: http://www.businesscycle.com/

Part of post… (from May)

END OF HOME PRICE DOWNTURN IN SIGHT

“With U.S. home values far below their boom-time highs, most observers are resigned to an indefinite downdraft in home prices. It is this uncertainty about the ultimate bottom in home prices that has converted so many mortgage-related derivatives into toxic assets. Yet, at long last, the end of the home price downturn is in sight.

One key reason for the turnaround in the outlook is housing affordability, which is hovering around all-time highs. The current combination of drastically reduced home prices and very low mortgage rates has hardly ever been seen in living memory…

Most importantly, the U.S. Leading Home Price Index (USLHPI), designed to predict cyclical turns in real home prices, has now been rising for five months… But a three P’s analysis (see chart below) of the level of the USLHPI reveals an even more promising picture… the recent upturn in the USLHPI is almost as pronounced as the median in comparable past cycles… it is almost as pervasive; and … it is just as persistent. The implication is clear: this is a genuine cyclical upturn in the level of the USLHPI. Such an upturn in the USLHPI amounts to a forecast of a cyclical upturn in the level of home prices this year…”

By: Tuesday Stories: Waiting To Buy A Home; Feldstein On Health Care; Schumy Returns? at The Brian Sullivan Blog

Tue, 28 Jul 2009 16:56:45 +0000

[...] Home prices (again) fall but less than expected [...]

By: AmenRa

AmenRa — Tue, 28 Jul 2009 14:51:07 +0000

@Mike

I know banks are not reporting ALL of their foreclosures. Many cancel the foreclosure at the last minute. There are many REO’s that haven’t been put on the market either. So I know I’ll have to wait before jumping to any conclusions.

By: Mike in Nola

Mike in Nola — Tue, 28 Jul 2009 14:01:24 +0000

You won’t know the bottom til it’s well past. Too many factors to draw a conclusion from a small period of time. For example, there was a moratorium on foreclosures during the winter. Fewer foreclosures on market meant less price pressure, rate on 30 year treasuries is now almost a full point higher than April/May. Reports that banks were avoiding foreclosures or keeping REO’s off market in hopes of a better market. If a lot of supply comes on, prices may drop again.

Not saying all this definitely will have an effect, it’s just that there are too many unknowns. And some may take awhle to have an effect.

By: AmenRa

AmenRa — Tue, 28 Jul 2009 13:44:07 +0000

I know it’s too early to declare a home price bottom but isn’t it the same thing as July/Aug 06 when people didn’t want to declare a home price top?