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Case Shiller Says Home Prices Dropped Less Than Expected Three Months Ago

Tyler Durden's picture




 

There was some good news for the home sector after Case Shiller the first sequential increase in home prices in almost a year, with the Composite 10 increasing 0.8% in April, and a 0.7% increase in the Composite 20 on a non-seasonally adjusted basis. On a SA basis prices fell again, this time by 0.1%, slightly better than consensus which was looking for a 0.2% drop (and lest anyone believes revisionism is contained to the BLS, the February/March decline was revised even more from -0.23% to -0.26%) and in line with Goldman's expectation noted earlier.  But before Toll and Lennar go ahead and prebuild another 10,000 empty units, there were some caveats: "In a welcome shift from recent months, this month is better than last - April’s numbers beat March,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “However, the seasonally adjusted numbers show that much of the improvement reflects the beginning of the Spring-Summer home buying season. It is much too early to tell if this is a turning point or simply due to some warmer weather...“Other housing statistics show the same trends. Single-family housing starts were up in May, but still well below their 2010 levels and still very close to their 30-year low. Existing home sales rose in May, but are still about 15% below last year’s pace and about 35% below their 2005 pace. While foreclosures remain a large factor in most parts of the country, the S&P/Experian Consumer Credit Default indices show a small decline in the pace of new defaults since last November. Other reports confirm that banks have tightened lending standards in the past year making it harder to qualify for a mortgage despite very low interest rates." Lastly, and perhaps most important, is that this is data that was relevant back in April... and that 6 out of 20 MSA just hit new lows. America is increasingly becoming a story of two polar opposites.

Full report.

 

 

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Tue, 06/28/2011 - 09:13 | 1408421 jtmo3
jtmo3's picture

And off to the races in equities we a going.

Tue, 06/28/2011 - 09:18 | 1408432 Clueless Economist
Clueless Economist's picture

This is a fantastic time to buy.  Rates are low and housing prices are down.  Mr Yun and I discussed this over lunch yesterday.

Tue, 06/28/2011 - 09:27 | 1408443 Pool Shark
Pool Shark's picture

 

No, this is a fantastic time to buy or sell a home.

Mr. Lereah told me so over his Venti Cinnamon Dolce Latte...

 

 

Tue, 06/28/2011 - 09:33 | 1408463 HelluvaEngineer
HelluvaEngineer's picture

Hmmm...the buzz appears to be wearing off quickly.

Tue, 06/28/2011 - 09:14 | 1408422 Id fight Gandhi
Id fight Gandhi's picture

What good news? Prices down since last year. The blip up in prices is being hyped.

Tue, 06/28/2011 - 09:15 | 1408427 Ivanovich
Ivanovich's picture

That was enough for a 5 point ES jump.  Wow!

Tue, 06/28/2011 - 09:19 | 1408434 Spartan
Spartan's picture

Look at this story on the Greece situation - http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_28/06/2011_396229

 

Quote - "government may be forced to call out tanks to prevent a run on the banks"

 

Tanks protecting the banks - says it all really.

 

 

 

Tue, 06/28/2011 - 09:33 | 1408455 Momauguin Joe
Momauguin Joe's picture

Superior firepower, bitchez!

Tue, 06/28/2011 - 09:39 | 1408485 SheepDog-One
SheepDog-One's picture

Call in helicopter gunships to protect the banks from people getting their own money. Says it all right there. They like the illusion that people own things, until they try to take possession of those things. Silly peasants, you want your money in your hands? How about a nice 155mm tank round thru your skull instead! WE are the bankers, WE own YOU!

Tue, 06/28/2011 - 09:23 | 1408437 Eternal Student
Eternal Student's picture

Wait. Last year, Case-Schiller said that you couldn't believe the Seasonally Adjusted numbers in this environment. So when did they announce that the SA were suddenly valid again? This sounds like just spin here.

Tue, 06/28/2011 - 09:24 | 1408438 LMAO
LMAO's picture

Green shoots everywhere.

Let's issue a mission accomplished statement Ben.

 

LMAO

Tue, 06/28/2011 - 09:25 | 1408439 Council of Econ...
Council of Economic Terrorists's picture

Good news will be when we finally hit bottom at what looks like 1997 levels.

Tue, 06/28/2011 - 09:32 | 1408451 SheepDog-One
SheepDog-One's picture

LOL, I need a more powerful electron micriscope to view this 'good news'.

Tue, 06/28/2011 - 09:30 | 1408457 Bill Lumbergh
Bill Lumbergh's picture

For those inclined to look at trends, every April back to 2001 has shown a month-over-month improvement in the Composite 20.  If the March before any given April was positive the following April was more positive; if the March before any given April was negative the following April was less negative.  In short we are looking at seasonal fluctuations which should already be expected given the trend but the media will act as if this is a first time occurence.

Tue, 06/28/2011 - 09:32 | 1408460 Oh regional Indian
Oh regional Indian's picture

Case Shiller.
Does it get more obvious than that, if names mean anything at all?

Case Shiller..... One who shills for the case.

Of a home being a good investment in any economic environment.

ORI

http://aadivaahan.wordpress.com/2011/06/21/thunder-perfect-mind/

Tue, 06/28/2011 - 09:40 | 1408473 SheepDog-One
SheepDog-One's picture

Home ownership is actually a huge joke, you never actually own the house. 

Tue, 06/28/2011 - 09:46 | 1408516 stev3e
stev3e's picture

I own all of mine.

Tue, 06/28/2011 - 09:59 | 1408555 jtmo3
jtmo3's picture

Really? You think. Try not paying the property taxes and see who REALLY owns all of yours.

Tue, 06/28/2011 - 15:45 | 1409752 stev3e
stev3e's picture

Yes, the Federal government can steal my homes and all my other wealth under a variety of guises but I'm still the owner of my homes.  That's why its called theft.

If the Federal government REALLY owned my homes, it wouldn't be theft.

Tue, 06/28/2011 - 15:42 | 1409754 stev3e
stev3e's picture

double post

Tue, 06/28/2011 - 09:48 | 1408524 Oh regional Indian
Oh regional Indian's picture

Indeed SD 1

http://en.wikipedia.org/wiki/Allodial_title

One needs to know the law if ownership means anything to you, eh? Anyoen ever wonder about all the ships in our lives?

Like owner-ship? Steward-ship? Champion-ship? 

Ships everywhere.

Hmmmmmmmm, somewhere, in a rather obscure corner of the interwebs, loony silver-foilers are claiming that Admirality Law is in effect in the Justice Systems around the world and that the fringed flag tells a tale.

by the way, it's the same here in India, just different guises due to a different social structure and Damn British Hand Me Down laws.

The only real choices now are total ignorance, vaporized on the sofa, bud boiling over, cheese too well cooked or Eyes wide open and present in the mement.....yes, mement.

We live life from mement to mement.

ORI

 

Tue, 06/28/2011 - 09:38 | 1408469 SheepDog-One
SheepDog-One's picture

I know people here trying to sell a house for 2 years, have lopped 30% off asking price and still no bites. All just BS tempest in a tea pot to perpetuate the Ponzi 1 more day.

Tue, 06/28/2011 - 09:37 | 1408477 knukles
knukles's picture

whoopie

And Neal Cas'ncarryon said on CNBS that there is no real reason to fear default from the perspective of the debt ceiling... which is true.  Interest thereupon is a portion, albeit large, of government receipts.
But went on to say that the arguments (er, intellectual debates, civil discourse) surrounding the event as are taking place will permanently damage Washington's credibility.

Ergo, get that ceiling raise and sell that paper.

First prize on the new game show "Talkin' Our Book, Boss"

I've been intellectually enriched so many ways I cannot count already this morning  so maybe ought just go golf.  The only logical response to everything's A-OK overload.

Tue, 06/28/2011 - 09:42 | 1408483 Greeny
Greeny's picture

AS Always people sell the bottoms and buying tops..

That nice house was good to buy for $400k in 2005,

now all of the sudden turn into no good

for $200k? Of course, wait till inflation picks up and buy'

in 5 years same house for $600k. Home prices won't stay

this low forever, if you not buying, then Europeans surely

scooping up Florida properties for pocket change with 1.43/dollar

Euro exchange rate.. Till Americans wake up, there will be no

properties left near the Ocean. Keep sleeping in the trailers.

Tue, 06/28/2011 - 09:54 | 1408534 spartan117
spartan117's picture

There is no wage inflation to help support home prices or your argument, for that matter.

 

http://www.doctorhousingbubble.com/ponzi-financing-era-over-in-united-st...

 

Tue, 06/28/2011 - 14:01 | 1409446 PuppetRepubl1c
PuppetRepubl1c's picture

+1 Spartan117

 

Until wages begin increasing house prices will continue falling.  

 

Why?  Real inflation experienced by the middle class is north of 6% (when you include the things the fed intentionally omits, like health insurance costs, gas prices, etc which middle class families must still pay for).  

 

Wages have been stagnant for decades.  Once the housing bubble popped all of this "fake wealth" disappeared in an instant and house prices immediately shifted to where they should have been all along had the government not artificially inflated the market.  There is absolutely zero reason to think they will begin increasing in value before the economy turns around.

 

Inflation, which is likely, also will not increase house prices.  Instead inflation will increase the cost to buy a home.... these are not the same thing.  People will need to take out loans with higher interest rates, which means the "value" of homes will be prevented from rising.  People will have to pay more for homes, but that additional money will go towards the bank in the form of much higher interest, not to the home seller.

Tue, 06/28/2011 - 09:44 | 1408490 apberusdisvet
apberusdisvet's picture

2 million AltA liar loan mortgages ready to reset in 5, 4, 3, 2.........!!!!

Tue, 06/28/2011 - 09:47 | 1408519 Pinktip
Pinktip's picture

Tue, 06/28/2011 - 09:45 | 1408509 LongBalls
LongBalls's picture

Nanny, nanny, boo, boo Grecians! Try to get your money back....we dare you!

Tue, 06/28/2011 - 10:26 | 1408635 overmedicatedun...
overmedicatedundersexed's picture

IN the end violence is the easy answer..who is better at it? kill the protests kill the mind of the serfs with plentiful drugs both legal and illegal..why do you think drug war never won?

today our society in USA is medicated with anti depressants, anti psychotics, anti anxiety drugs each at all time highs in volume sold.

high fat diets plenty of TV and sports to watch all dulling the senses and mind.

that is why there are no greek or mid east style riots here..throw away the drugs and wake up..

(ps banning of alcohol in ME society allows the populace to be more reactive)

good luck to free men everywhere. the mind is what they want to control.

Tue, 06/28/2011 - 11:03 | 1408824 disabledvet
disabledvet's picture

academic manipulated report done at the behest of the street (of course) and in hopes of avoiding the greatest collapse in municipal debt in American history.  in the parlance of "nuclear" we're dealing with "city busters" as the Russians like to call theres.  Get out of the way unless you either 1.  totally clueless or 2.  believe you really are the Muhammed Ali of investing.

Tue, 06/28/2011 - 14:55 | 1409623 dirtbagger
dirtbagger's picture

Why don't you shoot the messenger, guys?

If you have followed Case-Shiller on a regular basis, their reports have been decidedly negative on house price trends for the last 2 years. 

They are simply saying that there is some evidence of price stability in the housing market.  House prices are not going to decrease by large percentages forever.  New housing starts have been at extremely low levels for the last few years. NOD's, foreclosures, and REO's although still substantial are decreasing.   Certain market segements have already stabilized and prices have increased slightly.  

I currently reside in one of the worse housing markets in the US (NV).  Prices are down 50% from the July 2005 peak leaving prices at about the 99-2000 level.  The bottom market segement (130K or less homes) has already stabilized.  These homes are bought immediately, mostly for cash.  There is still some downside in mid and higher end properties which is dragging down the mean.  However, if you are an entry level buyer (in many cases buying is now cheaper than renting) in the NV market, it is unlikely that the combination of home prices and interest rates will be much more favorable in the future. 

I think the Case-Shiller report is beginning to reflect that those markets that have been slammed the worse (CA, AZ, NV, FL) are beginning to stabilize.  If the economy and employment improves, US housing may put in a bottom sometime in 2012.

There is a lot of negativity on ZH posts.  Those who suggest that perhaps the world is not ending tend to get rude rebuttals.  However, those who think housing is going to end in some type of collapse may need re-adjust their thinking hats. 

Food - Shelter - Water  Get It!

Tue, 06/28/2011 - 17:27 | 1410068 kennard
kennard's picture

Seasonally adjusted numbers are inaccurate with a high proportion of distressed sales. Further, prices should be adjusted for inflation. Factoring these out, today's news was bad, not good. The market needed any excuse to rise, however.

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