The Big Picture - Macro Perspective on the Capital Markets, Economy, Technology, and Digital Media

The Oct S&P/CS 20 city home price index fell by 3.4% y/o/y, more than expectations of a decline of 3.2%. The index itself fell to the lowest since March ’03 on a seasonally adjusted basis. Sequentially, prices fell .62%. Of the 20 cities, Detroit and Washington DC again led the gains y/o/y. Price declines were led by Atlanta, Las Vegas, and Minneapolis. Bottom line, with prices now double dipping, the question is of course when will this end and that won’t likely be until more of the foreclosure backlogs get worked off. With this said, prices are already down 33% from the highs in ’06 and thus likely reflects most of the declines that will be seen in this cycle but as seen in Japan, just because prices may soon stop falling doesn’t mean they are headed straight back up again.