Here Is Goldman's Spin On The Case Shiller Drop

Tyler Durden's picture

BOTTOM LINE: Case-Shiller index falls to new low for housing downturn. Month-over-month declines smaller than in late 2010.


1. The Case-Shiller house price index fell by 0.2% mom on a seasonally adjusted basis (-0.8% unadjusted), or 3.6% yoy. The level of the index fell to a new cycle low, and now indicates a peak-to-trough decline in house prices of at least 33.1%.

2. House price trends were mixed across regions. Washington DC remained the best performer, with price gains of 1.2% mom (seasonally adjusted) or 8.1% yoy. San Francisco, Miami, Seattle and Los Angeles also saw significant month-over-month gains in prices. In contrast, prices remained quite soft in Charlotte, Minneapolis, Cleveland and Atlanta. Prices in Minneapolis were down 20% from a year earlier.

3. Despite another month-over-month decline and a new low for the index, we are cautiously optimistic about the near-term outlook for house prices. First, while prices are still falling, declines are now substantially smaller than in late 2010. For example, in the three months to October the decline in the seasonally adjusted index was an annualized 10%. In the three months to March the annualized decline was about 3%. Second, the weakness in house prices appears concentrated in distressed sales. The Core Logic house price index-which allows us to divide prices into distressed and non-distressed-shows relatively firm prices for conventional sales.

Well, millions of underwater squatters just breathed a sigh of relief at this wonderful news.

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FOC 1183's picture

but Cramer said housing bottomed in June '09?

A.W.E.S.O.M.-O 4000's picture

Got a bud who just bought an apartment in Jersey City. Took out a 400+K mortgage (plus monthly maintenance & taxes). He said if the bank wanted to give him the money at 5% who was he to say no.

Hope springs eternal.

Careless Whisper's picture

let's see, 5% interest, plus a 2% annual decline in value, and according to shadowstats we have 8% inflation. does anyone know who to put all that in one chart?

SheepDog-One's picture

'Substantially smaller'....yea thats what SHE said, Goldman!

alien-IQ's picture

"spin" being the operative word.

LRC Fan's picture

Huge PMI miss-bullish

Mike2756's picture

That's ok, we will start exporting houses any day now. All we need is a weaker dollar.

SheepDog-One's picture

GS comments always with the undertone that any minute, home values in bankrupt america are set to rocket back up to bubble valuation tops. Peak insanity breached.

Cleanclog's picture

Sure not what I heard at numerous social gatherings over the long weekend.  Many many properties being put on the market now - either 2nd homes in vacation areas or more than $1million homes in suburbs.

Greenwich, Marin County, Piedmont, Lamorinda, Blackhawk $1-3 million homes - no bids.  Tahoe, Cabo, Utah ski, Mendocino, Sun River on the second homes.

Bottom is NOT in.

silvertrain's picture

A bottom is not in the cards anytime soon..2015 maybe..

DeadFred's picture

Do they have to go to a special school to learn how to write this stuff? Maybe they're politicians-in-training.

Edit: after reading my post I realize the special school is the one the short bus goes to.

GOSPLAN HERO's picture

GS is a true propaganda machine.

Lord Maximus's picture


GeneMarchbanks's picture

You polish that turd Goldman, nice and shiny now!

bronzie's picture

We now have two sources calling for a housing recovery starting in the 2032 to 2035 timeframe

Martin Armstrong bases his 2032 prediction on his cycle anaysis

Bloomberg is saying bottom in 2035 - not sure what they are basing their analysis on

As we move forward more and more analysts will acknowledge that housing is dead as an asset category for at least another 20 years

They'll also claim that nobody could have forseen the magnitude of the housing crash

Bloggers have been speaking truth about housing since at least 2002 - fuck all the sheep that chose (and still choose) to believe the MSM about housing (or anything else)

sbenard's picture

In other words, the "unexpected" drop was really expected after all!

Mercury's picture

2. House price trends were mixed across regions. Washington DC remained the best performer,...

Location, location, location?  You're kidding, I never thought of that.  Let's see here...distressed assets are doing better than non-distressed and the home of the only growth industry in the country is outperforming on a relative basis?  Wow. Just wow.

How can I become a Goldman "client" ??

Careless Whisper's picture

Mr. Viniar, Goldman’s Chief Financial Officer, testified:
“[A]cross 2007, we were primarily, although not consistently short, and it was not a large short. ... The short positions themselves made a lot of money in 2007, but they offset long positions that lost a lot of money in 2007.”2005

Goldman’s denials of its net short positions in the subprime mortgage market, and the large profits produced by those net short positions, are directly contradicted by its own financial records and internal communications, as well as its own public statements in 2007, and are not credible.

...courtesy of Senator Levin's Committee Report on Wall Street Gangsters (page 474)


Math Man's picture

Bottom is in. Housing unit shortage coming in 2012 bitchez! Now is the time to buy home builder stocks.

fuu's picture

Not even phoning it in at this point. What's wrong Math Man? Have you the long dark tea time of the soul and can't even muster the strength to troll anymore?


It's ok, you'll get your swing back.


Plus houses only cost $5 to dig out of the ground!

narapoiddyslexia's picture

Housing shortage???? We built ~2,000,000 units a year for about 10 years, when all we needed was half that. Moreover, the people who used to buy are now going to rent. So, best case, no shortage is going to happen for at least five or six years. 

Tortfeasor's picture

Did you get hacked, or are you just going full on Hamy mode now?  

ForWhomTheTollBuilds's picture



It only costs a small percentage of current prices build a house out from the ground.  Prices will fall off a cliff from here.



Math Man's picture

Houses trading for less than replacement cost + massive under building since '06 = recovery coming soon.

bronzie's picture

"massive under building since '06"

that MIGHT be a true statement IF housing sales had continued at the pace of 2004,5,6

Welcome to the new reality - houses aren't selling at that rate anymore - and there are several million vacant houses for sale currently on the MLS - then we have shadow inventory that is not listed for sale but would be sold in a heartbeat at the right (no longer available) price - then we have a huge demographic shift as the largest segment of our population moves towards coffins and urns (where they won't have much need for the 4000 SQFT mini-mansion) - who is going to buy all these over-sized, bubble-priced housing units? - the kids NEVER keep the house so you can bet the inherited house will go on the market for sale - and with 22% unemployment in this country (and even higher in the youngest segments of our working population - you know, the people that rent and buy housing so they can start out on their own ...) there is less demand for housing than there was in the 2004,5,6 timeframe

Keep drinking the Koolaid - hate for it to go to waste ...

Tortfeasor's picture

"Underbuilding" would imply that demand was greater than the supply being produced.  Not true in any context.  Months of supply still at extremely high levels and holding solid.  Spring buying season almost non-existent.  

When will you learn that there are too many active readers of ZH for your bullshit to fly.  Your disinformation posts simply provide an opportunity to show how ridiculous you opinions are.

Robslob's picture

I agree with MathMan...

As long as people can continue to live rent free he may be onto something...of course they must be allowed to buy "rent free" for him to be correct.

Smiddywesson's picture

This housing market is like a dead cat dropped from a plane, all splat, no bounce.

Cone of Uncertainty's picture

Yes, distressed sales are the problem.

And their will be millions and millions more of them bitches.

Goldman Sachs puts forth some excellent reasearch and analysis on this topic...FOR ME TO POOP ON!

Silver Alert's picture

First there was good bank/bad bank. Then good Greece/bad Greece. Now good house/bad house?


What they don't mention is that like 2/3 of home sales ARE distressed sales.

ghostfaceinvestah's picture

And distressed sales will continue to be 2/3 of home sales for the next couple years.  Their "analysis" is pure bunk - the foreclosure pipeline is as full as ever, and access to marginal credit (i.e. FHA loans) is getting costlier as the FHA increases insurance rates.

We have another 10% drop to go, at least, before we hit bottom.

Troy Ounce's picture

She: "Hi honey, good y're home. How was your day today?"

He: "Hi my love. Great actually, I brought out a press statement!"

She: "Oh, what's it about?"

He: " Not much, actually. I told the American people that plastic tents, carton boxes and open land underneath powerlines also have value. All these prices are going up..more than expected!

She: " it's all good?"

He: "It's all good my love..all good. Be happy you live in America"

rajc's picture

its transitory bitches :)

word of the year... transitory.

let poll it.

augie's picture

I'm "cautiously optomistic" about bedding monica bellucci, doesn't mean its going to happen.

PulauHantu29's picture

Don't worry, my agent said house prices only go up.

glenlloyd's picture

As usual the explanation is that since the declines are declining less we should be optimistic. It always amazes me how easily douches can spin something from bad to good.

GReally, beyond amazing!

dussasr's picture

I'm a real estate investor/house flipper/landlord in Indiana.  In my neck of the woods there are too many distressed sales in the pipeline to see an increase in prices.  The only good news I see is that the distressed sales are being absorbed into the market reasonably well.

When I see the new foreclosure filings and sheriff sales slack off THEN I'll start holding my breath for an increase in prices.