The S&P/Case Shiller® composite index for the month of September was released today. (Discussion underway in today's Bits Bucket).
"Another weak report; weaker than last month. The national index is down 1.5% from the third quarter of last year and 15 of 20 cities are down over the last 12 months. Other than Tampa, FL, there are no new lows this month but many analysts will argue that a double dip will be confirmed before Spring. While some of the bad numbers may reflect the end of the government’s tax incentive for first time homebuyers, there are other problems weighing on the housing market." says David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. "The national economy is certainly the number one issue for housing. Additionally, there is a large supply of houses on the market and further, hidden, supply due to delinquent mortgages, pending foreclosures or vacant homes. New construction is running at less than half the pace needed to meet normal demand, so a sustained recovery could be a ways off."
"Looking deeper into the data, in the monthly indices, 18 MSAs and both Composites were down in September over August. This is worse than August when 15 were down month-to-month. The only two which weren’t down in September were Las Vegas, which managed to stay a touch above the low set in July, and Washington DC. Overall, there are few, if any, good numbers in this month’s data."
11 comments:
Well, my predictions last month are somewhat off (too pessimistic) already. Still, I will repost them here just for fun.
2010...............MOM..........YOY
Sep 187.5.........-0.4%.......+3.8%
Oct 186.0.........-0.8%.......+3.3%
Nov 184.0.........-1.1%.......+2.7%
Dec 181.0.........-1.6%.......+1.2%
2011
Jan 177.0.........-2.2%.......-0.2%
Feb 173.5.........-1.9%.......-1.7%
Mar 171.5.........-1.2%.......-2.2%
Apr 170.5.........-0.6%.......-5.0%
May 171.0.........+0.3%.......-6.3%
Jun 172.0.........+0.5%.......-7.4%
Jul 173.5.........+0.9%.......-7.6%
Aug 175.0.........+0.9%.......-7.0%
Sep 176.0.........+0.5%.......-6.1%
Oct 175.5.........-0.3%.......-5.6%
Nov 174.5.........-0.6%.......-5.2%
Dec 173.0.........-0.9%.......-4.4%
2011
Jan 172.0.........-0.6%.......-2.8%
Feb 171.5.........-0.3%.......-1.2%
Mar 171.0.........-0.2%.......-0.3%
Apr 172.0.........+0.6%.......+0.9%
May 173.0.........+0.6%.......+0.9%
Jun 174.5.........+0.9%.......+1.4%
Jul 176.5.........+1.1%.......+1.7%
Aug 178.0.........+0.8%.......+1.7%
I still like this long term. Perhaps I was one month early, and the mild MOM downturn will begin next month. I guess we shall see.
I don't think we will see -2% months, or negative year over year, in DC for many years to come--until unemployment is going up, up, up again, or until the Republicans and runaway reckless Wall Street have a few years to burn the economy down again in other ways.
I suppose higher unemployment could happen sooner specifically in the DC area if they do decide to actually cut government spending, but of course they have ABSOLUTELY NO INTENTION of actually doing so, despite all their lying to get elected. No, they will go back to spending like drunken sailors, starting with a 700B welfare/bailout program for the richest americans. Cutting off unemployment at Christmas time is just a drop in the bucket, a minor gesture to remind the rich how much Republican leaders despite the middle class and the poor.
That's DESPISE the middle class and poor, not "despite".
"Scott said...I don't think we will see -2% months, or negative year over year"
Scott, out of curiosity, what effect, if any do you ascribe to the removal of the 8K buyers tax credit?
I ask because the unwinding of the credit is the basis for my negative YOY prediction. I see this winter as pretty slack as the effect of tax credit wanes.
That said, I do agree that -2% MOM may be a thing of the past. That -2.2% I have for Jan 2011 looks agressive right now.
Scott-
I agree with Anon that we will see negative YoY. I think there are a lot of things that could cause this including: higher unemployment, lower government/contractors pay, higher interest rates, high months of inventory, a double dipped recession... I'm not sure, which of these will happen, but there are plenty of options for why housing prices could/will come down.
As for getting rid of unemployment, doing this around Christmas might have been harsh, but its a little outrageous that people who haven't worked in 2 years are mad the government is no longer going to give them money to stay at home. Maybe its time for people to realize they may not get that 50-100K job that they used to have and settle for working anywhere that will hire them. There are plenty of jobs openings at fast food, Walmart... but people think they are too good work at a lot of low class places.
HB Says
"As for getting rid of unemployment, doing this around Christmas might have been harsh, but its a little outrageous that people who haven't worked in 2 years are mad the government is no longer going to give them money to stay at home"
Um the thing you have to look at is the Unemployed to job opening ratio.
It's about 6:1. Before you start wagging your finger at the unemployed, I'd suggest you look up the phrase "Structural Unemployment". It's what the GOP says when they say "We will accept 9% unemployment for the foreseeable future".
Obama screwed the pooch with the stimulus. Dumbest GodD&*n move I ever saw, and I was one of the ones saying it. The Stimulus should have hired 5 million people at $10/hour nationwide. Hire them as laborers working through Americorps, have them planting trees, fixing parks, installing electrical wires over major boulevards to run Electric buses.
That would allow the unemployment to be slashed and provide a major increase in public infrastructure.
it would also have shown a visible nationwide project.
Pat-
I would be perfectly happy with the government hiring the unemployed to clean up the country. My grandfather helped build a lot of trails in this area with programs like that. In addition you get a return on investment for fixing infrastructure unlike paying someone to stay at home.
I know what structural unemployment is and I understand that there are significantly more unemployed than job openings. Although this is true many more jobs would be created in this country if the talented unemployed people were willing to work for less. Major companies (GM, Intel...) are creating plants in foreign countries because labor is cheaper. There are millions of unemployed construction workers, if as a whole they were willing to work for $10/hr or less car plants would not need to be shipped out of the country. Over the past few decades trade has become global so we now need to be competitive with other countries and accepting lower wages would help fix part of our uncompetitiveness.
There may be some people who have been unemployed for 2 years who really are willing to accept any job, but I bet you many/most of these people have never applied to McDonalds, Walmart, or other places that pay minimum wage.
Globalization is making everyone, but corporate CEOs, poor -- one job at a time. There will be major deflation because people will not be able to afford what they used to.
Once again, I have to take issue with the C-S summary's statement that there is little "good news" in these numbers. There is very good news if you are a renter, trying to buy in most of these cities.
Ace-
I agree new sources always think higher housing prices are better. For renters thinking of buying, for owners thinking of getting a larger house, and for investors lower prices are better. Basically higher prices really only help people thinking of downsizing. Everyone would be much better off long term if we all spent far less on housing.
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