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Case Shiller Confirms Housing Double Dip Accelerates, Misses Estimates For Rebound, Snow Not Blamed

Tyler Durden's picture


Something funny happened on the way to the "wealth effect": we call it affectionately, the "poverty effect." At least for those who have homes. The November Case Shiller index confirmed that the double dip in housing is accelerating, with the composite index posting its 5 sequential decline. The 20 city composite came at -1.59% Y/Y on expectations of a rebound to 1.7%. Perhaps the Chaircreature should finally consider lowering those mortgage rates instead of focusing so much on the Russell 2000. What we are amazed by is that all that abundant California snow was not blamed on this one particular negative surprise.

Full release which merely confirms all we have been saying all along.


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Tue, 01/25/2011 - 10:15 | 902287 gwar5
gwar5's picture

They'll adjust for snow in upward revised figures next month, "unexpectedly"

Tue, 01/25/2011 - 11:16 | 902523 TruthInSunshine
TruthInSunshine's picture

The National Association of Realtors, National Association of Home Builders and National Mortgage Brokers Association all said it's the best time to buy any house, anywhere - and have been saying so since they were formed as organizations, including during the peak of the housing bubble.

Why would they lie?

Tue, 01/25/2011 - 12:25 | 902889 Lucius Corneliu...
Lucius Cornelius Sulla's picture

They're not making any more land...

Tue, 01/25/2011 - 12:50 | 903006 rassillon
rassillon's picture

Yes because that postage stamp size piece of land (surface only) you get with a house makes it worth it. 

Tue, 01/25/2011 - 13:37 | 903208 Temporalist
Temporalist's picture

You can't eat dirt.


And in other news...

Bloomberg reports on the "recovery":


Payrolls Decrease in 35 U.S. States, Led by New York

"Payrolls decreased in 35 U.S. states in December, while the unemployment rate rose in 20, showing the labor market recovery is slow to gather momentum."


I love how the Ministry of Alternate Reality phrases things.  "Recovery is slow to gather momentum" - like 3 years slow? 

Tue, 01/25/2011 - 13:43 | 903227 Sean7k
Sean7k's picture

Lol. The economy is like a depressive on prozac, keeps thinking he's cured after every dose.

Tue, 01/25/2011 - 10:21 | 902290 hedgeless_horseman
hedgeless_horseman's picture

UK blames snow for negative GDP.

The U.K.'s snow-battered economy shrunk for the first time in more than a year during the fourth quarter of 2010, a surprise negative hit that will trigger debate about the country's aggressive fiscal tightening and the direction of interest rates amid high inflation.


Clearly the major factor over the period was heavy snow which consigned the U.K. to a standstill over much of December. According to an assessment by the ONS, the weather subtracted 0.5% from GDP growth over the quarter as a whole. The point here is that, even then, the official ‘snow adjusted’ GDP estimate for Q4 would be a very disappointing ‘flat’. 
– Philip Shaw, Investec Securities

Tue, 01/25/2011 - 15:31 | 903599 ConfusedIdiot
ConfusedIdiot's picture

Payrolls decreased in 35 U.S. states in December, while the unemployment rate rose in 20, showing the labor market recovery is slow to gather momentum. The S&P/Case-Shiller index of home values in 20 cities fell 1.6 percent in November from a year earlier, the biggest 12- month decrease since December 2009,


“This kind of mixed picture, combined with some of the positives we’ve seen in retail sales and manufacturing data, rising credit, tells us we’re at a turning point,” said Steven Cochrane, director of regional economics at Moody’s Analytics Inc. in West Chester, Pennsylvania.


A turning point? No, please. Dec 7, 1941 was a turning point. August 6, 1945, was a turning point, Jan. 31, 1968, was a turning point.


Tue, 01/25/2011 - 10:18 | 902296 Racer
Racer's picture

More bad news? Of course not, BTFD, it is merely the peasants who are suffering.....

Tue, 01/25/2011 - 10:18 | 902300 Sudden Debt
Sudden Debt's picture

Looks like the banks are out of the woods



Tue, 01/25/2011 - 10:20 | 902301 Mercury
Mercury's picture

Perhaps the Chaircreature should finally consider lowering those mortgage rates instead of focusing so much on the Russell 2000.

No, we don't need lower mortgage rates.  We need to de-lever not re-lever.  The housing market needs to reach something close to equilibrium and we ain't there yet in many sub-markets.

Tue, 01/25/2011 - 10:23 | 902320 Tyler Durden
Tyler Durden's picture

Obviously we were merely referring to the Fed reverting to its original 2 mandates, and pulling off the throttle on the 3rd one.

Tue, 01/25/2011 - 10:25 | 902332 SheepDog-One
SheepDog-One's picture

220, 221, hey whatever it takes!

Tue, 01/25/2011 - 10:49 | 902425 bronzie
bronzie's picture

"220, 221, hey whatever it takes!"

classic scene from "Mr. Mom"

Tue, 01/25/2011 - 12:11 | 902813 Careless Whisper
Careless Whisper's picture

the privately owned federal reserve bank may have 2 mandates, officially, but their real mandate is to do what is in the best interests of the banks that literally own it.

Tue, 01/25/2011 - 13:42 | 903223 Temporalist
Temporalist's picture

"Takin' advantage of some of the time off to uh, add a whole new wing on here."

Tue, 01/25/2011 - 10:30 | 902348 Mercury
Mercury's picture

Thought that was a liitle out of character (could have been a snow-day Tyler fill-in).

Maybe the banks should be swapping debt for equity in many cases of under/non-performing mortgages since that's what often happens when corporations can't make payments.  Families get to stay in houses, pain is shared between the two primary interested parties and the market get's frigged with less.

Tue, 01/25/2011 - 10:18 | 902302 Deathtöngue
Deathtöngue's picture

In other news, several ducks were seen lining up in a row.

Tue, 01/25/2011 - 10:22 | 902318 Sudden Debt
Sudden Debt's picture

interesting. I've once seen 4 ducks and one was leading the way and the others followed.

The other day, I have also seen a flock of birds that where flying in a V patern!! I think the birds where trying to tell me something...


Tue, 01/25/2011 - 10:37 | 902382 kridkrid
kridkrid's picture

I saw the same thing.  I think the Visitors are coming.  Maybe the'll buy up some debt. 

Tue, 01/25/2011 - 10:39 | 902395 jus_lite_reading
jus_lite_reading's picture

Are those the same ducks I just saw fall out of the sky from "hypothermia?"

BEnron's attempt to kill the black swans has led to mass kills of all acquatic and avian life...

Tue, 01/25/2011 - 10:19 | 902304 Sudden Debt
Sudden Debt's picture

European banks are suing BAC for Countrywide scams!!!



Tue, 01/25/2011 - 11:17 | 902525 Spigot
Spigot's picture

Much more to come on the "big orgs who got sold shit are going to eff over the shit shovellers" meme...

Tue, 01/25/2011 - 11:20 | 902537 Hephasteus
Hephasteus's picture

Lifes a bitch and her name is Sue Yu.

Tue, 01/25/2011 - 12:53 | 903031 rassillon
rassillon's picture

Why's everything got to be the Chinese' fault?

Tue, 01/25/2011 - 10:20 | 902308 Xibalba
Xibalba's picture

Meanwhile:  Insurance continues to...well, ...crash.

Tue, 01/25/2011 - 10:20 | 902310 umop episdn
umop episdn's picture

But...but...the California snow I know of is definitely responsible for at least some of the 'poverty effect.' It was half of the 'hookers and blow' equation.

Tue, 01/25/2011 - 10:21 | 902312 TeMpTeK
TeMpTeK's picture

Expect home values to meet up with 2002 levels again...Its the only way

Tue, 01/25/2011 - 11:31 | 902571 Max Hunter
Max Hunter's picture

That would mean an increase in some places that i'm aware of..

Tue, 01/25/2011 - 10:21 | 902313 Alcoholic Nativ...
Alcoholic Native American's picture

My rent is only 225 a month. I honestly don't see how people can afford these 600+ rents.

Tue, 01/25/2011 - 10:29 | 902354 DOT
DOT's picture

Court ordered support.

Tue, 01/25/2011 - 11:04 | 902472 MachoMan
MachoMan's picture

Where the fuck do you live for $225 lol?  Do you have the house paid for or something and that's your property tax and utility costs?  Insurance? 

In BFE, we can get $350/mo out of a shitbird apartment...

If you have two wage earners that each make ~$25k/year, $600/mo on home payments is pretty easy...  you're looking at ~20% of takehome for rent...  you can easily tuck away 20% for savings/retirement under this scenario...  depending on where you live of course.

Tue, 01/25/2011 - 11:18 | 902484 hedgeless_horseman
hedgeless_horseman's picture

$27 per month, coming soon to the Friday Real Estate Section of your local newspaper:

Like the choice in color?

Tue, 01/25/2011 - 10:21 | 902314 Oh regional Indian
Oh regional Indian's picture

News had it that KaliFornication was due for the storm of storms, not the quake of quakes.

I think NUMBers will not tell any tales for now. It's all about geo this and geo that.

You know, politics, graphy, engineering, all of those geos.

And then there is Helios action. And Luna's distortions.

Homes are going to find their foundations trembling in this tipping point time, literally and figuratively.


Tue, 01/25/2011 - 10:22 | 902316 monopoly
monopoly's picture

It just affects the middle class. Those 43 million on food stamps already lost their home. I mean, just 60% of the economy. As long as the bonus money on wall street keeps moving up BMW and Mercedes will be fine.

What planet am I on. Do we break 12,000 today.

Tue, 01/25/2011 - 10:25 | 902339 Alcoholic Nativ...
Alcoholic Native American's picture

The middle class isn't shrinking, there's just an overcapacity of middle class McMansions in Suburbia.  I think, no, it's probably a combonation of both.

Tue, 01/25/2011 - 10:34 | 902373 DonnieD
DonnieD's picture

"Middle class McMansion". That's our problem in a nutshell.

Tue, 01/25/2011 - 10:25 | 902321 The Limerick King
The Limerick King's picture

So housing is still in the gutter

Is the recovery starting to sputter?

"No way" says Bad Ben

To all middle-class men

"Just bend over and pass me the butter"

Tue, 01/25/2011 - 10:40 | 902397 jus_lite_reading
jus_lite_reading's picture

Keep the limericks comin'! LOVE IT!

Tue, 01/25/2011 - 10:24 | 902322 Sudden Debt
Sudden Debt's picture

Here in Belgium it was on the news this morning that if you bought real estate in 2000 for the value of 200.000 euro, that property is now worth 600.000 on average. AND IT KEEPS ON RISING! IT EVEN DID SO DURING THE CRISIS!!


Belgium is clearly the exception and is in no way in a bubble :)

Tue, 01/25/2011 - 12:20 | 902857 TheGreatPonzi
TheGreatPonzi's picture

Same here in France.

There is big bucks to make in this time of pre-peak insanity, but I wouldn't risk being left holding the bag.

Many people are going straight to a wall of disenchantment. The prices are high but there is very few buyers, and even less people who buy with cash. When the old-timers who typically own the houses will need to sell, and thus have to lower their prices, we'll have a downward spiral.

Tue, 01/25/2011 - 12:59 | 903066 rassillon
rassillon's picture

"that property is now worth 600.000" 

I always cringe when people say what something is worth. I called BS back in 06, 07 when people were telling me their house was *worth* X-amount.00. I always said, then sell it. Something is only *worth* what you can get someone to pay for it.


Those people sure wish they had listened.

Tue, 01/25/2011 - 13:41 | 903220 bbucks
bbucks's picture

Oh yes, the good ol days of 2006.  I remember people telling me the same stuff.  "My house is worth such and such--I'm rich!"  I would simply tell them that it is not the house that is really worth more, it is that the dollar is worth less!   Again, a deer in the headlights look.

Tue, 01/25/2011 - 10:24 | 902323 SheepDog-One
SheepDog-One's picture

They didnt blame the snow? LOL, slacker US media...

Tue, 01/25/2011 - 10:24 | 902328 papaswamp
papaswamp's picture

Looks like I picked the wrong week to quit sniffing glue...

Tue, 01/25/2011 - 10:25 | 902330 bingaling
bingaling's picture

But the economy is recovering as corporations are taking out more and more loans and selling less while raising prices to make it appear all things are good . Next bubble Corporate bonds  . 

Tue, 01/25/2011 - 10:27 | 902341 Dexter Morgan
Dexter Morgan's picture

I love paper money.



Tue, 01/25/2011 - 10:28 | 902351 Poofter Priest
Poofter Priest's picture

Want to know of your real estate is properly valued?

Look at the demographics in your metro area.

Then calculate the 'affordability index rate' by figuring the price of the average house against the average family income. At least (minimum) the index should show 30%.

Of course figuring the average family income is trying to hit a moving target these days.

I'm expecting housing prices to have to go back to 1997 levels.

Tue, 01/25/2011 - 10:55 | 902448 bronzie
bronzie's picture

"I'm expecting housing prices to have to go back to 1997 levels."

I think we'll see 1998 values in SoCal

1998 is when real estate valuations started increasing faster than the rate of inflation - ie, the start of the bubble

according to bubble dynamics every financial bubble retraces itself fully and reverts back to its starting point - an overshoot to the downside is also common so values below 1998 levels are possible

I'll be waiting with cash in hand ...

Tue, 01/25/2011 - 11:15 | 902515 Poofter Priest
Poofter Priest's picture

Hmmmm, you could be right.


But the job market now is a lot more grim than when the bubble began. In fact...a lot worse.

That's why I said the average family income was a "moving target". It's moving down.

Tue, 01/25/2011 - 12:23 | 902560 TruthInSunshine
TruthInSunshine's picture

We're already back to 1997 where I'm at, if not 1994.

Next stop: 1984

Tue, 01/25/2011 - 12:46 | 902981 Lucius Corneliu...
Lucius Cornelius Sulla's picture

I doubt that some markets will ever recover.  There will probably be more ghost towns in the Arizona and Nevada deserts.

Tue, 01/25/2011 - 13:59 | 903266 Saxxon
Saxxon's picture

There will be ghost cities well within our lifetime, in the U.S.  China, on the other hands, builds ghost cities first.  It's a tragic farce.

Tue, 01/25/2011 - 13:19 | 903143 Sean7k
Sean7k's picture

Which will kill new construction of homes. Have you priced materials lately? They are too expensive compared to where prices need to fall. Which means, until the overhang gets bought, construction will not be coming back- except apartments/rentals and mobile homes. 

Oh yeah, they also brought the new housing code online. Have you priced the new circuit breakers? It will cost over $1000 dollars for a 220 box. They love to kick a guy when he's down.

Tue, 01/25/2011 - 10:28 | 902352 trillion_dollar...
trillion_dollar_deficit's picture

S'all good. DOW 12,000 will save us.

Tue, 01/25/2011 - 10:32 | 902366 Johnny Lawrence
Johnny Lawrence's picture

To the 25% of US homeowners underwater on their mortgages:

Lighten up, assholes. The stock market is going up.  Your 100 shares of the [insert name] Large Cap Growth Fund is going up!!

Tue, 01/25/2011 - 10:42 | 902403 Beatscape
Beatscape's picture

Is bad news still good news? Or, are we entering a new phase of where bad news = bad news?

Tue, 01/25/2011 - 10:46 | 902418 oh_bama
oh_bama's picture

20 city composite EXCEEDED expectations boys and girls!! BTFD!!!

Tue, 01/25/2011 - 10:58 | 902453 crzyhun
crzyhun's picture

Jeff Imelty has it all under control! Hey! he is the One's appointed annointed czar of the big economy.

Tue, 01/25/2011 - 10:59 | 902457 Downtoolong
Downtoolong's picture

Perhaps the Chaircreature should finally consider lowering those mortgage rates instead of focusing so much on the Russell 2000.


Perhaps the Chaircreature should consider finding a way to buy up actual distressed homes instead of all the shitty distressed mortgage securities backed by them. Silly me, that would imply someone in the Fed and/or the major advising banks actually knows something about the Main Street physical housing market.



Tue, 01/25/2011 - 13:25 | 903163 Sean7k
Sean7k's picture

Maybe he should burn down Marriner Eccles  and then shoot himself and the rest of the Reserve presidents. That would solve part of the problem.

Tue, 01/25/2011 - 14:13 | 903289 Saxxon
Saxxon's picture

The U.S. is developing a permanent underclass; actually has been for years, but now it is starting to come to fruitition.

I would not be at all surprised to see the Fed begin subsidizing housing on a much larger scale.  There is a swelling mob that will never be able to support itself with the inflation we are seeing and will continue to see.

We will have a large segment of the population on permanent welfare.  Cheesefood products, Big Macs and, maybe, clapboard houses on the Federal cuff, paid for by the broken middle class.  Plans are underway now and I doubt it can be stopped.

Americans must break themselves of the naivete and automatic optimism that was inculcated in them for years.  It is a form of hypnosis. 

So many Americans will be 'heartened' by the 'ringing tones' of their deep-voiced Magister tonight; he may even appear at the podium with jacket off and sleeves rolled up.  This farce is why I covered my short put on yesterday!

Disclosure: Born and raised an American so I know of what I speak. 

Tue, 01/25/2011 - 11:02 | 902468 Rockfish
Rockfish's picture

 GM who should of met the same fate as the dodo bird now quietly announces plant build and job creation, But OOOOOnooo not here but in Mexico.


GM To Build Engines In Mexico 
1/21/2011 9:43:00 AM
General Motors is investing $540 million to build fuel-efficient engines at its plant in central Mexico, which is expected to create 500 jobs.




Tue, 01/25/2011 - 15:40 | 903630 ConfusedIdiot
ConfusedIdiot's picture

Here in Mexico the positive effects of Bernanke's stimulus can be seen from Puebla to Sinaloa. The tourists of course are terrified but the 2008 negative 8% drop in GDP and 12% UE has been completely turned around and the Mexican nationals adore TARP, QEI, QEII and hope to see QE13 before Bernanke catches on.


Tue, 01/25/2011 - 11:07 | 902482 Thoreau
Thoreau's picture

A house is worth what someone else is willing to pay for it. Houses are not selling. Ergo, most houses are worth the shelter they provide; ergo, their utilitarian usage. Trying to find legitimate comps for appraisals is next to impossible. Ergo, the chart-mysticism thingy.

I scout property all over the US, and in most places that I'm familiar with I see/don't see huge inventories of real estate that are being kept off the market; surely in the effort to drive/save prices. I believe that hundreds, if not thousands of mid to small banks are on the imminent verge of collapse; unless Big Bro provides direct support. All I can say is, if you're looking for property, be patient and wait a bit longer. Unbelievable opportunities are coming soon.

Tue, 01/25/2011 - 11:19 | 902532 Rockfish
Rockfish's picture

UnfortunatelyThoreau I must agree, but I think it has do with people not be able to afford the prices with the jobs they have.  Sure there's a few (20%) of the working who can but the majority (80%)  at an average of 45k a year are not going to beable to buy $200k house, P.I.T.I.  +/-1,400.00 per mo and closing costs for the buyer about $14k

Tue, 01/25/2011 - 11:51 | 902692 oh_bama
oh_bama's picture

that means 47% of americans are making top dollars doing what they love to do. Their wages are way higher than other part of the world...


So BTFD boys and girls!!

Tue, 01/25/2011 - 12:56 | 903009 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Prices still bubbly in my area as they stand at 2004-2005 levels.  However, I did see an advertisement for a condo auction in Sun Valley over the weekend.  Minimum bids of $500k on condos that were listed at $1.4M a few years ago.  Not bad:)

Tue, 01/25/2011 - 11:54 | 902703 Don Birnam
Don Birnam's picture

Today, the Chairman and his acolytes meet...

As his black, 3-ton SUV quietly cleared the iron gates of the Federal Reserve, inside the cavernous monument a lone Goldman Sachs organist in the Fed's musical amphitheatre begins the Chairman's anthem...

Tue, 01/25/2011 - 12:49 | 903001 dbradsha
dbradsha's picture

DRV !!! :-)

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