Case Shiller Index Falls 17.5% in July
U.S. home prices show continued record declines and double digit declines in existing single family homes across the United States.
During the 1990-92 cycle the record low was -6.3%. While the annual returns of the two indices continue to reach record lows, the pace of the decline has slowed, particularly over the last three months. For the three months of May thru July, home prices cumulatively fell about 2.2%; whereas for the three months of February thru April, and November 2007 thru January, the cumulative rates of decline were closer to 6.0-6.5%.
“There are signs of a slow down in the rate of decline across the metro areas, but no evidence of a bottom” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “Little positive news can be found when cities like Las Vegas and Phoenix report annual declines as large as -29.9% and -29.3%, respectively, and all 20 cities are still in negative territory on a year-over-year basis. The Sunbelt continues to be the story, with the seven cities that basically represent that area reporting annual declines roughly between 20 and 30%.
While some cities did show some marginal improvement over last month’s data, there is still very little evidence of any particular region experiencing an absolute turnaround.” (emphasis added)
Here is the Case Shiller Price Indices, and a table of cities:
>
S&P/Case-Shiller Index - July 2008
chart courtesy of Standard & Poors
>
S&P/Case-Shiller Index - July 2008
table courtesy of TFS Derivatives
>>
Source:
Continued Record Home Price Declines
S&P/Case-Shiller Home Price Indices, July 2008 (published Sep. 30)
http://www.homeprice.standardandpoors.com
(Spreadsheet)
Tuesday, September 30, 2008 | 09:49 AM | Permalink
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Let's see...the 20 city comp peaked at around 220 (I adjusted for inflation)...now at 166...down 25% so far. It has to get to about 110 just to hit previous highs (excluding this bubble)...only a 33% drop from here.
What will that do to credit markets? You don't want to know.
Posted by: Steve Barry | Sep 30, 2008 9:59:49 AM
Yawn. What about the 90% of the nation that didn't have a large increase. This is the flaw with the Case-Schiller report. It ignores Main Street and concentrates what happened in Crazytown. Pardon me if I don't give a crap.
Posted by: dead hobo | Sep 30, 2008 10:00:47 AM
NY at -7.8% has some catching up to do.....
Posted by: leftback | Sep 30, 2008 10:04:35 AM
Anyone know why there are there two different columns headed "Jun 08 v Jul 08" with different data?
Posted by: Jonny | Sep 30, 2008 10:07:43 AM
For those on the D-Train, read Ben B this morning:
http://benbittrolff.blogspot.com/2008/09/inflation-deflation-money-velocity-and.html
David Bernstein is in this camp as well... interesting article in Barron on Saturday. if you have a subscription this will work:
http://online.barrons.com/article/SB122246744271480397.html
For better or worse, my brain simply cannot go there yet, if ever. Fiat is infinite. It is not a commodity. But, I'll continue to watch it play out...
Posted by: karen | Sep 30, 2008 10:11:47 AM
Dollar surging..why, I don't really care...at this point, in 4Q, large cap tech will be crushed due to lack of currency boost they are addicted to.
We know the 800 names with no shorts...but QQQQ has an astoundingly low short ratio of under one half day...every short could cover in a few hours of current volume. Ergo, no backstop there and no squeeze possible. My link also drops down all the top QQQQ names which each have low short interest.
Disclosure: Long QID
Posted by: Steve Barry | Sep 30, 2008 10:13:23 AM
What happened to what's-his-name that said housing was going to return to normal in July?
For that matter, where is M.S.? I miss his negativity.
dead hobo: Here in Western PA, we did not experience the crazy boom...but we are now feeling the drag of the bust...do you have any evidence that contradicts S&P's findings?
Posted by: Mr. Obvious | Sep 30, 2008 10:14:11 AM
Wait until the Fall/Winter...prices will resume the pace of their prior decline.
Posted by: Charm City | Sep 30, 2008 10:15:29 AM
Yawn. What about the 90% of the nation that didn't have a large increase. This is the flaw with the Case-Schiller report. It ignores Main Street and concentrates what happened in Crazytown. Pardon me if I don't give a crap
------------------
Flatville still mortgaged itself to 0% equity and refied with ARMS at low rates.
Posted by: D. | Sep 30, 2008 10:16:41 AM
Yawn. What about the 90% of the nation that didn't have a large increase. This is the flaw with the Case-Schiller report. It ignores Main Street and concentrates what happened in Crazytown. Pardon me if I don't give a crap.
Lots of main streets had access to the punchbowl.. Which is the main reason why some form of bailout is necessary (since Main St. got in bed with Wall St. when they decided to sell into the whole MBS/CDO shadow economy thing..) even if it's distasteful as hell.
http://www.thehousingbubbleblog.com
Documentation from every state in the union, and many countries around the world...
BTW: There are also quite a few small/medium banks that abstained from this orgy, who knows, maybe First Bank of Podunk will become the new (old) WaMu or something, if they can buy mortgages at 0.05-0.10/$ with all their dry powder..
Posted by: Dr. Kenneth Noisewater | Sep 30, 2008 10:17:05 AM
"What about the 90% of the nation that didn't have a large increase. This is the flaw with the Case-Schiller report. It ignores Main Street and concentrates what happened in Crazytown."
Actually, a lot more people live in areas covered by this index than in areas not covered by this index. A common fallacy among people arguing population density stuff - people don't live in Montana, in aggregate, they live in major metro areas.
Posted by: M1EK | Sep 30, 2008 10:28:18 AM
Ahh, I got it: raw vs %. Can't see how Boston will remain so well insulated for too long. Wonder how much of the 'burbs is getting included.
Posted by: Jonny | Sep 30, 2008 10:28:51 AM
Burnett has a new tag line to go with her standard "market well off its lows"...she finds a meaningless silver lining and says "take it where you can get it"...heard it 3 times today.
Posted by: Steve Barry | Sep 30, 2008 10:29:34 AM
"Yawn. What about the 90% of the nation that didn't have a large increase. This is the flaw with the Case-Schiller report. It ignores Main Street and concentrates what happened in Crazytown. Pardon me if I don't give a crap."
Yep, all the index does is sample the places where all the activity was, where the gains were, where the housing wealth that fueled the "boom" was created, where the loans were originated. I don't care about any of that either. MY house is fine.
I bet if you exclude all the national bank powerhouses, the banking system picture looks better, too. Biased "doomsday" reporting I think.
Posted by: Jasper | Sep 30, 2008 10:31:19 AM
Just checked Zillow and for what it's worth my suburban Chicago home in a "mature" neighborhood is UP ~5% YOY. Also house across the street just sold for asking price in less than a week.
"It's the end of the world as we know it and I feel fine!"
Posted by: TempusFugit | Sep 30, 2008 10:46:44 AM
@ Steve Barry (aka The QID King):
"Burnett has a new tag line to go with her standard "market well off its lows"...she finds a meaningless silver lining and says "take it where you can get it"...heard it 3 times today."
What she means is "lose your money, suckers..". Actually I am "taking it where I can get it" today. But then I'm a trader.
Posted by: leftback | Sep 30, 2008 10:50:25 AM
Just checked Zillow and for what it's worth my suburban Chicago home in a "mature" neighborhood is UP ~5% YOY.
Zestimates aren't worth much. Let us know when you sell your house for the Zestimate, and then it will be a useful data point.
Posted by: Renting in Mass | Sep 30, 2008 11:00:54 AM
If I could sell my house for what Zillow says it is worth, I'd do it yesterday.
Posted by: Mr. Obvious | Sep 30, 2008 11:09:22 AM
17.5%?
Is that a lot?
Posted by: J. Livermore | Sep 30, 2008 11:16:03 AM
Agree with poster regarding refinancing of Flatville. Numerous stories in the press in the last year of refinancings in previously virgin territory. City neighborhoods most BP readers would never live in. Towns proximal to urban areas normally reserved for working poor. Any single one of these "community refi's" representing billions of dollars. Money was sucked out of every possible orifice, based on inflated house value, and we all know that only a fraction of that money added value to those neighborhoods and towns.
Posted by: Tony Fleming | Sep 30, 2008 11:34:08 AM
"It ignores Main Street and concentrates what happened in Crazytown. Pardon me if I don't give a crap."
I care because I do not want my "Main Street" dollars to go to bailing out Crazytown.
Posted by: Blackhalo | Sep 30, 2008 11:37:50 AM
Hey!!!
Who moved my punchbowl???
Posted by: Rip van Winkle | Sep 30, 2008 11:51:38 AM
"I bet if you exclude all the national bank powerhouses, the banking system picture looks better, too. Biased "doomsday" reporting I think."
I strongly suspect this too. Let the little fish eat their carcasses. Too big to fail, my ass. Something will fill the void, and hopefully it will be more sensible the next time around. Disaster is crucial to evolution.
An economy that is entirely dependent on credit is never going to be stable, anyway. All that credit just made the top few percent insanely wealthy, and mortgaged the rest of us for the rest of our lives.
Don't call it a capitulation until Wall Street sidewalks are littered with jumpers.
Posted by: Mysticdog | Sep 30, 2008 11:58:07 AM
Steve Barry @ 10:13:23 AM
“QQQQ has an astoundingly low short ratio of under one half day”
Good point. But you have to balance that against the VIX. The VIX is probably a better short term indicator.
Posted by: DL | Sep 30, 2008 12:41:02 PM
@DL: I'm strictly long term now...but VIX cannot be trusted here. With no shorting of financials, puts will be at a premium for hedging purposes...thus VIX will climb higher than you expect.
Posted by: Steve Barry | Sep 30, 2008 1:29:21 PM
