The The S&P/Case Shiller® composite index (graph here) for the month of November was released today.
"'While we continue to see broad improvement in home prices as measured by the annual rate, the latest data show a far more mixed picture when you look at other details.' says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. 'Only five of the markets saw price increases in November versus October. What is more interesting is that four of the markets – Charlotte, Las Vegas, Seattle and Tampa – posted new low index levels as measured by the past four years. In other words, any gains they might have seen in recent months have been erased and November is now considered their current trough value. On the flip side, there are still some markets that continue to improve month-over-month. Los Angeles, Phoenix, San Diego and San Francisco have seen prices increase for at least six consecutive months. Looking at the annual figures, four markets – Dallas, Denver, San Diego and San Francisco – have finally entered positive territory, something we really haven’t seen in at least two years in most markets'.Note: I am working on finding the revised number for October 2009. It appears there was an October 2009 revision, and the month-over-month decline should be -0.5% and not -0.3%.
'To add more mixed signals, we are in a seasonally weak period for home prices, so the seasonally-adjusted data are generally more positive, with 14 of the markets and both composites showing improved prices in November. On balance, while these data do show that home prices are far more stable than they were a year ago, there is no clear sign of a sustained, broad-based recovery.'"
18 comments:
Paging Robert...paging Robert (AKA Mr. CS hits 188 4 months from now). How ya feeling buddy? Still confident in your V shaped recovery?
In all honesty, I too am having to rethink my bracketed 160-180 L shaped recovery. I believe much of this is a result of govt intervention, but I also believe when the govt manipulation is removed, there is little chance we even sniff the 160 mark again.
For right now, I am sticking with it, but give me another month to see if I am so sure.
In the mean time, this is your chance to take the early buyout...if you recall, your first of three (6-12-18 month) predictions was for CS to hit 188 in the next 4 months. You still feel confident about that, or do you want to start slip slidin away from that?
Go Caps!
At least CS isn't dropping. Any sign of stabilization is good for consumer confidence (thus buying, spending,etc.).
There has been a bump on the low end and a dearth of inventory at all price points. Neither points to further drops.
jmho
Harriet, the updated numbers appear to be available here. It looks like almost every month is revised after the initial released value.
"VA Investor said - C-S isn't dropping.."
With fed/treasury/FHA all in and last minute rush for 8k in November - I call it levitating in the mid-air.
Fed has finished 92% of planned MBS purchases program last week.
Linky
In the Washington region, prices fell slightly, 0.2 percent on a seasonally adjusted basis.
This Post article has the monthly drop listed this way. Maybe some numbers are seasonally adjusted and some are not and that explains the -2% or -5% discrepancy?
Article is worth a read. If I'm gleeful quoting Yun you can only imagine how bearish the rest of the experts are:
"In California, Florida, in the ground-zero zones, it could take 15 years to fully recover," said Lawrence Yun, chief economist for the National Association of Realtors.
During a normal market, home prices rise 3 to 5 percent a year, Yun said. But during the housing boom, the appreciation rate was twice that in many areas. In the Washington region, home prices rose by 10 percent or more a year between 2001 and 2005, he said. "In the Washington market, which was one of the more bullish markets, it's going to take many years for people who bought at the peak to see those" prices again, Yun said.
Every once in a while Yun tells the truth. I feel like NAR must punish him for a few days because he usually then is quoted in the next article being super-optimistic.
TBW said...If I'm gleeful quoting Yun you can only imagine how bearish the rest of the experts are"
Heh -- too bad that "years to recover" doesnt apply in the immunozone. A house I am interested in assessed 2003-2009 as follows:
2003 -- 344K
2004 -- 419K
2005 -- 502K
2006 -- 534K
2007 -- 532K
2008 -- 532K
2009 -- 540K
Early estimates are 2010 will come in at 545K -- so in my case, "years to recover" = zero.
it will take time for the immunozones to pop
Or alternatively that the assessments didn't follow the bubble rise all that accurately either. I don't think many places that sold for $300ish in 2003 would be selling for 'only' $545 in 2006/7. The bubble really was that dramatic.
The Anonymous,
Are you sure no improvements were made to that house. That could skew the results. From Ace's observations it sounds like most of Arlington was down in 2009 from 2006 levels as well as 2008 levels.
pat,
What do you see as the catalyst for the "immunozones" to experience a correction or "pop" as you call it?
Are you still a believer in "the it's moving in" theory?
Xpo -- I agree this one may be a bit of anomaly it doesnt seem that dramatic a rise compared to others.
TBW -- I am certain this house has no improvements (perhaps one of the reasons it didnt rise as much)
VA Investor -- im pretty sure Pat has no idea what the catalyst will be. His "it will take time" (aka "its moving in") is just something you say here in polite company -- kinda like "hello" or "take care".
The fact of the matter is people have been saying that for years:
2003 price 344K
2003 "Pat" says "just wait, it takes time to pop"
2004 price 419K
2004 "Pat" says "just wait, it takes time to pop"
2005 price 502K
2005 "Pat" says "just wait, it takes time to pop"
2006 price 534K
2006 "Pat" says "just wait, it takes time to pop"
2007 price 532K
2007 "Pat" says "just wait, it takes time to pop"
2008 price 532K
2008 "Pat" says "just wait, it takes time to pop"
2009 price 540K
2009 "Pat" says "just wait, it takes time to pop"
2010 price 545K
Pat says "it takes time to pop"
The same thing will be said in 2011, 2012, 2013, etc. even as prices likely continue to stagnate, or possibly rise slightly. Its always "just wait, its moving in".
The real question is how many years of waiting for "its moving in" before Pat thinks maybe it just aint gonna happen 2015? 2020? 2030? Death?
At least the CS isn't dropping? Well, it isn't rising, is it? And had the tax credit not been extended, don't you think it might have been even lower? We will lose all of the gains of this past year. They were only the result of heavy govt intervention.
Well Kev, we'll have to see. Supply and demand, and all that. Ordinary people will see the level prices as a signal to buy - that the worst is behind us.
I know this doesn't make most here happy, but the opposite would have been an unwarranted and very destructive panic-driven loss of confidence. The consequences would hardly be limited to house prices in your desired nabe.
Yes well what you would call a "unwarranted and very destructive panic-driven loss of confidence" I would call "the market correcting itself". After all, there's nothing that will inspire a purchaser quite like lower prices.
I just don't buy into the baseless theory of self-sustaining, neverending spiral of housing price declines. If that were true then there never was any value to housing to begin with.
"Kevin said...I just don't buy into the baseless theory of self-sustaining, neverending spiral of housing price declines. If that were true then there never was any value to housing to begin with."
Kevin the condition is deflation and it is extremely rare (only seen twice in the last 80 years in the US). Its not that its neverending, its just that it is very hard to stop once it gets cranking (hence it has a tendency to overcorrect).
Nouriel Roubini made this point a year and a half ago as he advocated for the govt intervention:
"A severe recession and a severe financial crisis cannot be avoided at this point. Only much more radical government action will limit the financial meltdown and start to put a floor on the financial markets collapse. This government intervention would not be aimed to prevent the necessary adjustment of asset prices; it would be aimed at ensuring that the necessary adjustment is not disorderly."
Very prescient words IMO
Yes, that's regarding a recession. A housing market correction is a different scenario. It's like any sort of commodity bubble correction. The fear people talk about in general isn't exactly deflation, at least not as Roubini was describing it. It was that falling prices in RE will lead to a further falling in RE prices, and god forbid our retiring baby boomers can't sell their house come retirement for ten times what they bought it for.
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