The S&P/Case Shiller® composite index for the month of May was released today.
"'While May’s report on its own looks somewhat positive, a broader look at home price levels over the past year still do not indicate that the housing market is in any form of sustained recovery,' says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. 'Since reaching its recent trough in April 2009, the housing market has really only stabilized at this lower level. The two Composites have improved between 5 and 6% since then, but this is no better than the improvement they had registered as of October 2009. The last seven months have basically been flat.'
'The May 2010 data for 15 of the 20 MSAs and the two Composites show an improvement in annual returns compared to April’s report. With the month-over-month data, while 19 of the 20 MSAs and the two Composites were positive, we are in a strong seasonal period for home prices, so that was largely expected. In addition, there may still be some residual impact from the homebuyers’ tax credit, since they affect any purchase that closes through June 30th 2010. We need to watch where the housing markets will go after these temporary stimuli go away. June’s existing and new home sales and housing starts data do not show much real improvement in those statistics either. It still looks possible that the housing market might bounce along the bottom for the foreseeable future, before showing any real improvement that will filter through to the rest of the economy.'"
21 comments:
182.10
Last reached this in October 2008, first reached this in May 2004 in the middle of the skyrocket phase of 3% MoM gains...
Odd how they talk about flat prices in housing as if that were a bad thing. We have deflating or flat prices in everything else, which weren't causal actors in this recession, why wouldn't we have them in houses?
Cara-
I think we will see 184 then 185 for the next two months before it levels off and quickly starts heading down again. You are correct though that with the 3% months you were seeing in 2004 prices falling or rising 5-10% only takes you back/forward a couple months for when the price was originally reached.
Redfin DC blog
Has the tiers plotted. "The low tier was up 2.1%, the middle tier rose 1.6%, and the high tier increased 0.9%."
compared to last month:
"The low tier was up 2.4%, the middle tier rose 3.2%, and the high tier increased 1.6%"
for a two month cumulative gain of:
4.55% low
4.85% middle
2.5% high
low this month under 283k
middle 283k to 436k
high over 436k
(all boundaries positions are up)
So basically CS is saying that there were almost 5% price gains in the sub 500k market in just the final two months of the $8k credit. Good thing this insanity had a known expiration date unlike a normal bubble.
Cara-
I agree it is really sad that people are paying 10-30K in order to get 8K. I hope you are right that CS is not correctly adjusting for the fact that a higher percentage of houses sold during the last few months were move in ready than usual.
hb,
Yeah, I hope so too.
"HB said...
I agree it is really sad that people are paying 10-30K in order to get 8K."
Im not so sure thats really an accurate assessment of whats going on HB. After all, in San Francisco where the bounce has been twice as strong as what we see here, are people paying 20-60K more to get 8K?
Likewise, in Las Vegas where prices never bounced at all, are they paying 10K to 30K less in order to get 8K?
Actually, maybe they are, but thats sorta tangential to my point. My point is, instead of ascribing all of the recent activity to the tax credit, cant part of it be due to the fact that some area fundamentals are simply stronger than others?
Maybe thats not what you are trying to say, but it kinda sounds that way.
Anon-
Yes some areas are stronger than others, but housing prices were clearly going down ~0.5%-1% a month and had been doing this for 6 months. I find it oddly suspicious that right as the credit ended housing switched from small losses to massive gains. Housing trends tend to be fairly slow so I just don't think housing would have gone from falling 0.7% to rising 2.4% in one month without intervention.
I think HB means they're paying that much more than they would have had the credit not occurred.
The Anonymous,
Under hb and my's assumption that prices/CS will revert to March or February levels post-tax credit, then actually, yes if prices were higher (and not just an un-corrected for shift towards move-in ready homes) then people here did finance 10-30k more to get $8k in cash. Comparitive fundamentals may have been what allowed there to be a mini-bubble here and in San Francisco, but they don't negate the February-June-September comparison in how much a buyer pays.
I agree with Cara and Kevin. Thanks for helping clarify my position.
HB (and others) if I understand you correctly, basically you are only referring to the latest spring bounce as tax induced, and not necessarily the first bounce we saw in spring 2009 correct?
The Anonymous,
In this particular discussion, yes, just the most recent blip.
" HB (and others) if I understand you correctly, basically you are only referring to the latest spring bounce as tax induced, and not necessarily the first bounce we saw in spring 2009 correct?"
I can't speak for them, but I'm convinced that the 2009 bounce was from the credit too. I stand fully ready to admit I'm wrong if those CS number don't start tanking in the next few reports.
"contrarian said...
Only if you deny the reality of what is published every day"
Really? The mere publication of something on some random corner of the internet makes it "reality"?
Was it "reality" when Hal Turner (who you insisted was a trustworthy source - before you deleted it) said the US is secretly shipping Amero coins to China to replace the US Dollar?
http://www.truthed.com/videos/179__hal_turner_shows_an_amero.htm
And what about your new source, Mr. Whitney? Was it reality when he wrote this missive http://www.globalresearch.ca/index.php?context=va&aid=1328
Was it reality, when in April of 2009, (just as home prices started their 15 month gain) Mr. Whitney said:
"the downward slide in housing prices is gaining speed"
Did that happen? Did the home price decline GAIN in speed from April 09 til now? What about this statement:
"In March, housing prices accelerated on the downside indicating bigger adjustments dead-ahead. Trend-lines are steeper now than ever before--nearly perpendicular."
Bigger declines DEAD AHEAD??? No 1+ year of increases you need to warn us about first oh prescient observer of reality? What about this:
"Housing prices are not falling, they're crashing and crashing hard."
Funny thing to say just as prices started on a 15 month upward trend.
Still, dont worry Contrarian. Im sure all your various sources of "reality" will all turn out to be correct. 1989 was the start of Great Depression II, just as Prechter said. The dow did hit 40,000 in 2008, just as Harry Dent said. The US government did ship 800B ameros to china, just as Hal Turner said, and home prices are not falling, they're crashing and crashing hard, just like Mike Whitney said...glug, glug, glug, glug...
Anon-
I am mostly talking about the most recent blip. I agree it is a lot harder to decide if what happened in early 2009 was based on the credit or fundamental strength of different areas/low interest rates.
"Contrarian said...
My point has been made about the "stress test" article by Mickey Mouse, er, I mean Turner -- Congress just passed the financial reform legislation. They passed it because the banking system is STILL unstable and WILL collapse, which makes my point the stress test was a sham. Congress is simply preparing for the inevitable."
REVISIONIST HISTORY ALERT!!! REVISIONIST HISTORY ALERT!!!
So thats it then Contrarian? Thats what all that Hal Turner garbage was all about? If so, why dont you go back and FIND THE ORIGINAL POST WHERE YOU WROTE THAT and PROVE to us that this was your true intent.
Cmon Contrarian, this is a golden opportunity for you. You should be salivating at the opportunity to make a mockery out of me while simultaneously vindicating yourself. All you have to do is find that past quote of yours on this blog!!! Go find that quote and show us...show us that that was your true intent afterall!!!
More like Anonymous Smugness Alert. Not that an alert is ever needed for something that is constant-state.
Kev -- this isnt smugness. This is full scale mockery & condescension.
So cmon Contrarian, show us that post. Show us what you "really" meant regarding Hal Turner & the stress test!!!
You're correct. I think you and I were separated at birth. One bear, one bull, equally in-your-face rude.
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