Housing Deterioration Continues

Tuesday, June 26, 2007 | 09:32 AM

"The housing market has continued to deteriorate throughout the second quarter" and "the supply of new and existing homes has continued to increase, resulting in declining home prices across our markets.

As Lennar looks into the third quarter and the rest of the year, it continues to see weak, and perhaps deteriorating, market conditions' and expects a third-quarter loss."

-Lennar President/CEO Stuart Miller

 

>

Case Shiller Home Price Index, Year-over-year price changes
Case_shiller_june
Source: S&P

>

As the chart above shows, the S&P/Case-Shiller House Price Index fell the most it has in 6 years. Dropping 2.1% y/o/y, this is the index' 4th consecutive down month. Home prices are still up 26.5% from 3 years ago, and 8.8% from 2 yrs ago.

CNN/Money reports that "While sales picked up from the early part of the year, they tumbled 15.8 percent from May 2006 - marking the 18th straight month of year-over-year declines."

This index differs from the pricing data from the Office of Fed'l Housing Enterprise Oversight (OFHEO) in that it includes the homes in all price ranges -- OFHEO pricing data only covers "conforming mortgages" which doesn't include most of the upper end of the housing market.

Meanwhile, Home Inventory continues to rise: The WSJ reported the number of homes on the market "increased 5% in May, adding to a glut in many parts of the country and threatening to push prices lower as the housing market keeps tumbling."

This amounts to a 15 year high of home inventory. And, all this inventory is not going away anytime soon. At current sales levels, the annualized housing sales rate has slipped below 6 million -- 5.99 -- a four-year low.

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Breakdown of the S&P/Case-Shiller House Price Index by region:



S&P/Case-Shiller Index - April 2007

 













Apr 06

Mar 07

Mar 07R

Apr 07

Mar07 v Apr07

Mar07 v Apr07

Apr06 v Apr07


Bos

177.62

168.52

168.54

169.60

1.06

0.63%

-4.5%

Bos

Chi

165.58

167.04

167.04

165.87

(1.17)

-0.70%

0.2%

Chi

Den

137.28

134.20

134.20

134.86

0.66

0.49%

-1.8%

Den

LV

233.78

228.55

228.55

226.65

(1.90)

-0.83%

-3.0%

LV

LA

270.44

264.58

264.58

263.36

(1.22)

-0.46%

-2.6%

LA

Mia

276.37

276.89

276.89

273.53

(3.36)

-1.21%

-1.0%

Mia

NY

214.97

211.97

212.11

211.65

(0.46)

-0.22%

-1.5%

NY

SD

249.35

233.28

233.28

232.64

(0.64)

-0.27%

-6.7%

SD

SF

217.52

211.09

211.09

211.47

0.38

0.18%

-2.8%

SF

WDC

248.86

236.96

237.11

235.29

(1.82)

-0.77%

-5.5%

WDC

Comp

224.99

219.54

219.59

218.93

(0.66)

-0.30%

-2.7%

Comp










Table courtesy of HousingDerivatives

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Housing: Everything is fine, nothing to see here!
Video (15 second commercial pre-roll)



>

Sources:
A Hodgepodge of Declining Growth Returns in Home Prices
S&P/Case-Shiller® Home Price Indices
June 26, 2007 09:00 AM EST PDF
http://www2.standardandpoors.com/spf/pdf/index/062607_HomePrice.pdf

Glut of Homes Puts Pressure on Prices; Inventory Rises 5%
KELLY EVANS
WSJ, June 26, 2007; Page A2
http://online.wsj.com/article/SB118277925445347058.html

S&P/Case-Shiller Home Prices Fell 2.1% in April, Index Shows
Courtney Schlisserman
Bloomberg, June 26  2007
http://www.bloomberg.com/apps/news?pid=20601087&sid=aDPbZ0uuxP6E&

Lennar Swings to Quarterly Loss, Sees Continued Market Weakness
JOSEE ROSE and JUDY LAM
WSJ, June 26, 2007 7:03 a.m.
http://online.wsj.com/article/SB118285271237148344.html

No sign of life yet for new home sales
Chris Isidore
CNNMoney.com, June 26 2007: 11:10 AM EDT
http://tinyurl.com/2q59yv

Inventory of homes for sale hits 15-year high
Existing-home sales off 0.3%; 5.99 million annualized rate's a four-year low
Rex Nutting,
MarketWatch, 4:55 PM ET Jun 25, 2007
http://tinyurl.com/2ece2u

Tuesday, June 26, 2007 | 09:32 AM | Permalink | Comments (23) | TrackBack (0)
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Comments

Just heard a zinger on CNBC- the realty lady said, upon reporting that homebuilding in the West was down, "The West, which has been a tricky market, down %1.9. That's, you know, there's not a lot of land out there, so not a lot of building going on..."

How does one get that job?

Posted by: Isaac | Jun 26, 2007 10:05:31 AM

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