Record Low for Annual Declines for Case Shiller Index

Tuesday, July 29, 2008 | 10:14 AM

"We're going to see continued declines in house prices, much more so in problem areas. The decline in home prices, while necessary to clear the inventories, is building in expectations of more house-price declines, which is keeping potential buyers on the sidelines.''
-Mickey Levy, chief economist at Bank of America Corp

"We see no immediate signs of this housing downturn relenting."
-Richard Dugas, Pulte Chief Executive Officer .

>

Home price data continued to worsen in the US through May 2008. Unlike some of the foolishness heard from the perennial bottom callers, prices are actually accelerating to the downside reaching new record lows.

Marketwatch notes that home prices have returned to where they were in 2004 -- any price appreciation between then and now has been wiped out. The surge in Home prices -- a cumulative 52% from 2003 through 2006 -- still leaves home prices significantly elevated above historical norms.

The S&P/Case-Shiller Index shows annual declines in prices of existing single family homes of 15.8%:

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S&P/Case-Shiller Composite Home Price Indices

Caseshiller_index_may_2008
Source: S&P

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This was the second straight month where all 20 regions posted annual declines. 9 of the areas tracked are at record lows, while 10 regions are in double-digits. Year-over-year, Las Vegas and Miami were again the weakest markets -- down 28% each.

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Caseshiller_table_may_2008
Table via TFS Derivatives

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Sources:
Record Low Annual Declines Recorded in May 2008 for the Home Price Indices
S&P/Case-Shiller, July 29, 2008
http://www.globalindices.standardandpoors.com/data/pdf/CSHomePrice_%20Release_072943.pdf

S&P/Case-Shiller May 20-City Home-Prices Fall 15.8%
Timothy R. Homan
Bloomberg, July 29, 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=a1ikgtmfigTw&

Property Derivatives
Fritz Siebel
CME Housing Futures, July 29, 2008
http://www.tfsbrokers.com/property_derivatives.html

Tuesday, July 29, 2008 | 10:14 AM | Permalink | Comments (31) | TrackBack (0)
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Comments

Other than FL, NV, AZ, CA prices seem to have bottomed or are close to it. CA price declines were less than I would have expected based on numerous articles coming out of so cal.

Take some Prozac and dream on about your and the IMF's silly projection.

Also, for the composite 20, after declining by about 2% per month for several months, April went down 1.2% versus the prior month and May went down .9% versus the prior month. This is better than I expected. For people with a working lobe, that is DEceleration.

~~~

BR: Sold to you!

Posted by: kerry | Jul 29, 2008 10:28:12 AM

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