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Case-Shiller Index Shows Sixth Consecutive Month Of Seasonally Unadjusted Housing Declines
March Case-Shiller data has been released: the seasonally-unadjusted Case-Shiller index has now declined for 6 straight months after peaking at 146.7 in September of 2009, for the composite 20 index, and is now back to 143.4, a level last seen in June of last year. This was a 0.5% decline from the February reading of 144.06. The biggest drop in the tracked 20 MSAs was in Detroit, at -4.1%, with Minneapolis and Chicago second and third, while prices increased in Cleveland, San Diego, San Francisco.
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LA and San Diego up 10%+ y/o/y? I'm sure that's sustainable. What are the unemployment rates there? 2%? 3%? Wages must be up too.
LA, San Diego and parts of the SF Bay aren't just up. There's been a friggin madhouse rush for houses in some neighborhoods. Multiple offers, overbidding, and general mania. Back to the 2006 mania. People not only got caught up in the tax credit, but were under the impression that rates would go up after the Fed bailed from the MBS area.
Also, there's a $10K State Tax Credit that is going very quickly. It will probably be gone by the end of this month.
This has been pure nuts. You can't reason with these people. But now they are starting to supect that there's going to be a hangover.
IMO, the Feds managed to sucker the last fools with cash and credit into trying to prop things up.
It's been that way too in Arizona, at least until the beginning of the month. I think some "savvy buyers" did get decent deals from freaking out investors who bought houses and couldn't unload them before the incentives expired. But even these "savvy buyers" are going to find that their homes will dip a bit in value and won't raise for years, if at all. Many of the "savvy buyers" already have a home in the area and think they'll rent the old one out until conditions improve and then sell it. But they are poised for trouble, I think.
I know I overdo this link to Dr. Bubble, but he collects the best charts on CA RRE. Note Reason #4....the shadow inventory.
www.doctorhousingbubble.com
I agree, the Dr. rocks!
Tax credits, MBS purchases, low interest rates, QE. All designed to get proles back into assets they can't afford.
I absolutely despise the economic establishment in this country.