patrick.net

Back to below 100 on the chart to get back to any normality.

Barry Ritholtz sounding out the numbers:

>>Today, the S&P Case Shiller NSA 20 checked in at 139.27; the previous post-bubble low is 139.26.

Wow. The NSA C-S 20 price is a not-so-whopping factor of 1.00007 above the post-bubble low. Is anyone going to speak up AGAINST the double-dip coming now, or will at least one of them put their quack where their beak is(*)?

(*) Translation: eat their words.

swebb says

If you cut out the bump in the graph from the homebuyer tax credit, it doesn’t look like the current prices are plummeting like before…it doesn’t look inconsistent with the idea of “bouncing along the bottom” from my vantage point.

If there were any bounce preceding the tax credit, this would be a very valid point. As of now, there's no "bounce" that was naturally-occurring.

justme says

Barry Ritholtz sounding out the numbers:
>>Today, the S&P Case Shiller NSA 20 checked in at 139.27; the previous post-bubble low is 139.26.
Wow. The NSA C-S 20 price is a not-so-whopping factor of 1.00007 above the post-bubble low. Is anyone going to speak up AGAINST the double-dip coming now, or will at least one of them put their quack where their beak is(*)?
(*) Translation: eat their words.

Add inflation to 139.26 and we have already busted the so called 2009 bottom.

bubblesitter says

If there were any bounce preceding the tax credit, this would be a very valid point. As of now, there’s no “bounce” that was naturally-occurring.

Why does there have to be a bounce preceding the tax credit? Maybe the "organic" bounce coincided with the distortion caused by the tax credit. It's hard to separate them, especially because the tax credit period was pretty long.

I guess the main observation I have is that the slope of the graph before the tax credit period looks a lot more negative than the slope after the tax credit period. It doesn't appear that house prices resumed their trajectory once the tax credit went away.

this is a running average for Dec, Jan Feb right?

toothfairy says

this is a running average for Dec, Jan Feb right?

Yes.

junkmail says

“House prices falling for 8th month in a row…”

Do you live on a hill?

I don't understand what you mean by "live on a hill". But, house prices falling for 8 months in a row isn't all that meaningful on its own. Magnitude is more important. (they could fall by $1 for 800 months, for example..)

Again, my observation is that the magnitude of the decrease before the tax credit was significantly higher than the apparent magnitude of the decrease after the credit expired. So different that it can't be ignored. Prices just don't appear to be falling at anywhere near the rate they were before the tax credit. I hope they resume their fall, but so far the data doesn't seem to support it.

swebb says

junkmail says

“House prices falling for 8th month in a row…”
Do you live on a hill?

I don’t understand what you mean by “live on a hill”. But, house prices falling for 8 months in a row isn’t all that meaningful on its own. Magnitude is more important. (they could fall by $1 for 800 months, for example..)
Again, my observation is that the magnitude of the decrease before the tax credit was significantly higher than the apparent magnitude of the decrease after the credit expired. So different that it can’t be ignored. Prices just don’t appear to be falling at anywhere near the rate they were before the tax credit. I hope they resume their fall, but so far the data doesn’t seem to support it.

The rate of decline before the fall was based on fear and panic. Since then people have been appeased by government intervention and are less worried. A drop below '09 prices could open up that type of mania again, or not. But just because they may not fall at the same rate again doesn't mean they won't fall. Homes are still unaffordable in many areas, unemployment is still high, and non gov't backed financing is difficult to get. If the gov't pulls out of the mortgage guaranteeing game (as proposed) over the next 5 years prices should continue to fall.

Swebb, you're comparing 8 months versus 3 years. I drive more miles in three years than I do in eight months. Doesn't mean I'm driving less or more per month during those 3 years.

Shawn says

But just because they may not fall at the same rate again doesn’t mean they won’t fall. Homes are still unaffordable in many areas, unemployment is still high, and non gov’t backed financing is difficult to get. If the gov’t pulls out of the mortgage guaranteeing game (as proposed) over the next 5 years prices should continue to fall.

I agree. All are much better arguments for a sustained and significant housing decline than the recent graphs.

@swebb Forget the 'hill' comment, it was a short-hand comment about reference points. If you think house prices are 'bouncing along the bottom as they did from 91 to 97' (Or could)... You asked the question: "Could you be so wrong to call 2009 the bottom?"

Answer: Well it depends how good an investor you are. As for 91 to 97... I distinctly remember '95 - '96 as being worse as the other years you listed. Accuracy aside... If you buy a home in '91 and have to wait until '98 to see appreciation vs. buying in '97 and only waiting a year to see your home appreciate. Which would you choose?

A: You'd have to go with '97, because your money would be tied up for 6 years doing nothing.

I think the nervousness shown in this forum with calling the 'bottom' lends me to believe some here fear that if you don't anticipate the market returning, you'll 'miss-out' as the market rockets back to... I don't know... 2004? 2005?

It's not going to happen. There will be many false re-starts and fails as we slowly drift down to where Fannie and Freddy are pulled out altogether and banks will struggle to get other private institutions to take the mortgage notes off their hands.

There won't be enough private credit to fund all of the loans at the prices of today, so something will have to give and the sellers will have to break, because unless the buyer is printing money in the basement, where's it going to come from?

I know we're talking cross-purposes here... I know you're coming from an academic point of view, I'm just injecting some common sense. I don't think I'm saying anything new either, I'm just pointing out graphs and numbers don't buy houses. People do and graphs and numbers do a shitty job of predicting what people will do.

Try call the next general election today with numbers and graphs.

junkmail says

Answer: Well it depends how good an investor you are. As for 91 to 97… I distinctly remember ‘95 - ‘96 as being worse as the other years you listed. Accuracy aside… If you buy a home in ‘91 and have to wait until ‘98 to see appreciation vs. buying in ‘97 and only waiting a year to see your home appreciate

I bought in early 90s. Like so many back than, it was not an investment, it was a purchase like i would purchase any goods. My 'investments' are in stocks and bonds which generate earnings. We wont see a bottom until this dreadful mentalilty of pegging a home as an investment is gone.

in the bay area for march, short sales were 17.6% or sales and foreclosures another 31.5%.
http://dqnews.com/Articles/2011/News/California/Bay-Area/RRBay110414.aspx
49% of all sales were foreclosures or short sales.
1 out of 2 sales was a distressed property.
every other sale repesents a person, bank or loan owner losing a substantial amount of money.
in this environment, where half the sales are distressed, it will be very difficult for prices to appreciate.

the case shiller inde indicates weakening prices:
http://www.socketsite.com/archives/2011/04/spcaseshiller_san_francisco_value_decline_accelerates_i.html

one thing to note is the momentum of the YoY Change in CS index.
once the trend starts up or down, it keeps going in that direction for several months (and even multiple years).

robertoaribas says

we still have reduced foreclosures due to the recent roboscandal, state attornies general looking into bank processes.

So, we still have delayed foreclosures to deal with, and their impact on the market. Despite this, prices are still sliding.

DEFINITELY something to keep an eye on.

Despite EVERY SINGLE IMAGINABLE government tactic to support and prop up RE values, they are still falling - that shows just how pathetic and sad the situation is. You can't have homes worth a relatively large X amount in a nation that has a fundamentally hollowed-out economy that produces mostly low-paying service-sector work (minus government sector which is just based on the USD reserve status printing press mechanism), it just isn't going to work. Now take out larger and larger chunks of those low, real-dollar paychecks (inflation), and you expect RE to GO UP? I wish I could understand the bulls, but I just can't. I think the vast majority of them are just clueless, mainstreamer baby boomers who are used to "USA, number 1, etc." It's ridiculous, laughable. They are in for a very rude awakening.

schmitz_kris says

Despite EVERY SINGLE IMAGINABLE government tactic to support and prop up RE values, they are still falling

Don't underestimate their imagination. They'll come up with some new gimmick.

klarek says

schmitz_kris says

Despite EVERY SINGLE IMAGINABLE government tactic to support and prop up RE values, they are still falling

Don’t underestimate their imagination. They’ll come up with some new gimmick.

Beat me too it.