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"Widespread Slowdown In Home Price Gains": Case-Shiller Misses, Rises By Slowest Since 2012

Tyler Durden's picture




 

The fourth (or is it fifth?) dead cat bounce in the US housing market is rapidly fading, as we just confirmed by the latest Case-Shiller Home Price Index data for the month of June, which saw a Y/Y increase in home prices of just 8.07%, below the 8.3% expected, and the slowest increase since December 2012. As the report noted, "for the first time since February 2008, all cities showed lower annual rates than the previous month." On a monthly basis, the NSA index, Case-Shiller's preferred, rose by 1.0% for the 10 and 20-City composite, with the Seasonally Adjusted composite declining for the second consecutive month: the last time there were two consecutive monthly declines during a price declining phase was in late 2010.

But while the housing index may be declining at the national level, some regional markets continue to stand out on the upside, likely attracting offshore laundered money by Chinese, Russian, European and Arab "investors" - broken down by cities, New York led the cities with a return of 1.6% and recorded its largest increase since June 2013. Chicago, Detroit and Las Vegas followed at +1.4%. Las Vegas posted its  largest monthly gain since last summer.

On the other hand, all 20 tracked cities saw their year-over-year rates weaken in June. For the second consecutive month, San Francisco saw its rate decelerate by almost three percentage points – from 18.4% in April to 12.9% in June. Phoenix showed its smallest year-over-year gain of 6.9% since March 2012. Cleveland showed a marginal increase of 0.8% over the last 12 months while Las Vegas led with a gain of 15.2%.

Finally, on a seasonally adjusted basis, for those who care about such things, 13 out of 20 cities posted a sequential decline.

And the commentary from the report:

“Home price gains continue to ease as they have since last fall,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “For the first time since February 2008, all cities showed lower annual rates than the previous month. Other housing indicators – starts, existing home sales and builders’ sentiment – are positive. Taken together, these point to a more normal housing sector.

 

“The monthly National Index rose 0.9% in June. While all 20 cities saw higher home prices over the last 12 months, all experienced slower gains. In San Francisco, the pace of price increases halved since late last summer. The Sun Belt cities – Las Vegas, Phoenix, Miami and Tampa – all remain a third or more below their peak prices set almost a decade ago.

 

“Bargain basement mortgage rates won’t continue forever; recent improvements in the labor markets and comments from Fed chair Janet Yellen and others hint that interest rates could rise as soon as the first quarter of 2015. Rising mortgage rates won’t send housing into a tailspin, but will further dampen price gains.

Which, perhaps, is another reason why despite all the rhetoric, rates simply won't rise.

 

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Tue, 08/26/2014 - 09:30 | 5144446 LawsofPhysics
LawsofPhysics's picture

To me, the data is confirming that the majority of home sales are oligarchs buying more rentals.  This would suggest that that buying is slowing down as well.

Tue, 08/26/2014 - 12:06 | 5145188 boogerbently
boogerbently's picture

Interest rates up =  housing sales down.

 

I don't know what all those other words and charts are about.

Tue, 08/26/2014 - 09:32 | 5144457 NoDebt
NoDebt's picture

This has to be one of the few data sets where the seasonally adjusted numbers are NOISIER than the underlying non-seasonally adjusted data.

What possible purpose does seasonally adjusting this data serve??

Tue, 08/26/2014 - 10:41 | 5144797 A Nanny Moose
A Nanny Moose's picture

Cui Bono?

Tue, 08/26/2014 - 10:45 | 5144818 duo
duo's picture

The appraisal districts choose whichever number is higher.  They've already decided my house is worth 30% more than last year.

Tue, 08/26/2014 - 10:49 | 5144826 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

There we go duo. Your house has a price way above what anyone is willing to pay to tax the hell out of you. Say hi to those illegals enjoying your tax money.

Tue, 08/26/2014 - 09:32 | 5144461 Seasmoke
Seasmoke's picture

All I see is RED arrows showing price reductions. And this has been throughout the entire summer. Just wait until winter. These For Sales in a nice area in NJ ARE NOT MOVING AT THESE $500,000 PRICES. ITS OVER !!!

Tue, 08/26/2014 - 09:38 | 5144486 NoDebt
NoDebt's picture

You gotta go up-market.  I saw this phenomenon when I was trying to sell my Mom's old place late last year/earlier this year.  Good house, good school district, low taxes.... and nobody wanted it.  It wasn't a palace, just a "regular guy" house.  Not a single offer from anyone looking to buy the place to live in.  Only "investors" looking to rent it out.

And rent-seeking buyers do NOT pay retail prices.  They pay wholesale prices.

Tue, 08/26/2014 - 09:44 | 5144509 Headbanger
Headbanger's picture

Just wait for the first Ebola case to hit the U.S.

I bet there's been a few already that have been hushed up to prevent them from being the long awaited Black Swan event.

Tue, 08/26/2014 - 10:43 | 5144637 toady
toady's picture

"rent-seeking buyers do NOT pay retail prices.  They pay wholesale prices."

It's rediculous what these people offer. Not a week goes by without a letter from these guys about one of our rentals. We give them a call about once a year, just out of curiosity, and they never offer more than 50% of current market price. They get pissed when I laugh at them, but I'm sure they get more than a few people that throw up their hands and give up.

 

Something is better than nothing.

Tue, 08/26/2014 - 09:33 | 5144462 philipat
philipat's picture

Yup. The word is out that perhaps those AAA CDO's based on Rental Income, might not be such a good investment, except of course to Pension Funds and Municipalities? Yawn....

Tue, 08/26/2014 - 09:37 | 5144482 j0nx
j0nx's picture

Sold my section 8 / illegal alien infested hood house over a year ago for what I owed thinking home prices would drop. Here I am over a year later and not only have they not dropped, prices on homes have continued to go slowly up. I can't stand this rental anymore so either I quit my job and we move away to some cheaper area or we take our chances and buy this year. I keep waiting for this down turn but home prices have stabilized and don't appear to be headed lower any time soon.

Tue, 08/26/2014 - 09:42 | 5144495 NoDebt
NoDebt's picture

You're brave for trying the Section 8 thing.  My brother's Section 8 ownership story sounds almost identical to yours, same timeframe, too.  Prices on those things haven't really gone up, but they haven't gone down either.

Tue, 08/26/2014 - 10:58 | 5144856 j0nx
j0nx's picture

No, you misunderstood. I didn't rent my home to them. I owned a home and THEY took over my hood causing home prices there to crater which took me 5 years to dig myself out from under. I sold as soon as I could reach par. We have been renting a family home for the past year that is in dire need of renovation and imo not safe to live in but the family member who owns it is cheap and doesn't want to put any money into it. We keep coming to the conclusion that even with my excellent job and high salary, the cost of living in NoVa has simply outpaced my income potential and it may be time to quit and move away. I'm giving it until the end of the year to see what shakes out and then we need to make some tough choices.

Tue, 08/26/2014 - 12:02 | 5145148 Dingleberry
Dingleberry's picture

Jonx...you did the right thing. Hoods generally do not improve once section 8 comes to town. Gentrification can work, but only in the most desireable of places. And even then, you may get caught in an accidental cross-fire via a drive by with AKs.

Your hood will see lower tax collections, increased demand for cops and other services like welfare, schools go to absolute gansta shit, etc. I lived this and saw this for decades. You are lucky you recouped some value. Many areas do not. BTW, you just confirmed a value of renting vs. buying: ease of mobility.

I know it sucks, but this is what happens when your hood becomes liberal and compassionate and the state takes over for daddy and da little childrenz become feral and schools become prisons/zoos.

Plan to move. To a galaxy far, far away.

Tue, 08/26/2014 - 10:06 | 5144615 greyghost
greyghost's picture

yep just slowly creeping up in price. however please note the use of the word "JUST" in this article. home prices went up "JUST" 8.07% year over year. why was the word just used at all, was the author expecting a 12% or 14% increase? oh please, feel sorry for me as my $200,000 house is now worth $216,000 this year. an increase of "JUST" $16,000....really? just another writer paid by the word and not content.

Tue, 08/26/2014 - 10:13 | 5144644 fiddler_on_the_roof
fiddler_on_the_roof's picture

J0nx
Just go fucking buy. Don't wait any longer. Home prices after a lull for 1 year (there will be no price drop but just steady) will jump again.

My track record is good. I bought my house during 2011 trough.
So just do it and don't listen to ZH.

Tue, 08/26/2014 - 10:57 | 5144858 j0nx
j0nx's picture

Mmm hmm. Heard that one before...

Tue, 08/26/2014 - 09:40 | 5144492 lester1
lester1's picture

Home prices are inflated right now, and who wants to be tied down to owning a home ? Not me !

Tue, 08/26/2014 - 09:47 | 5144498 Dr. Engali
Dr. Engali's picture

The talking heads on teevee crack me up. Every year it's the same thing; "home prices are finally on the rise and that is the final boost we need for a sustainable recovery"

It's like Hitler said; 

“If you tell a big enough lie and tell it frequently enough, it will be believed.”
Tue, 08/26/2014 - 10:23 | 5144693 q99x2
q99x2's picture

Last one out is a rotten egg.

Tue, 08/26/2014 - 10:38 | 5144787 JRobby
JRobby's picture

Guess those TBTF's will be holding on to all of that "real estate owned" transferred from "non-performing loans"

Of course they will continue to loan hedge funds and private equity the fiatsobucs to take chunks of it off of their balance sheets.

Tue, 08/26/2014 - 10:39 | 5144793 Bumbu Sauce
Bumbu Sauce's picture

The flippers have totally fked many of us out of first time home ownership.  I can't buy a fixer upper in any white neighborhood, and I sure as hell am not buying into a black neighborhood.

Tue, 08/26/2014 - 13:41 | 5145715 JRobby
JRobby's picture

Are you calling hedge funds and private equity "flippers"?

Tue, 08/26/2014 - 11:52 | 5145093 FreeNewEnergy
FreeNewEnergy's picture

This shit will not end for a while. I've been waiting for the echo-crash since March 2009, and it hasn't happened. There's no gain for TPTB in a crash at present, maybe somewhat of a pullback in October (for election purposes - change from A team to B team), though I would not count on it.

One would have thought that with the Fed ending QE in October, the markets would be reacting, but they aren't. Instead, stocks keep going higher (and analysts keep trotting out onto CNBS saying valuations are "reasonable" or other such rubbish) and interest rates keep going lower. Obviously, the Fed has not ended QE, they are merely disguising their pumping better, re: Belgium.

Not that it matters much, because everybody is invested in the status quo. For me, personally, at age 60, I can clearly state that I have never experienced a period of such outright fraud as what's occurred since 2007. The Fed and the banks own the markets, all of them. Fortunately, they're not very interested in small, rural acreage, which is my future. Gimme my 3-12 acres, little house and I'll be just fine on whatever SS pays, or doesn't pay.

At present, the main consideration most Americans should have is PAID-FOR (or nearly paid for) housing over their heads, no debt and not too heavy taxation. Anything else - be it gold, silver, paper, a job, stocks, bonds, or any "financial assets" - is just garbage, and could be nearly worthless in coming years. A house and some land, well, at least you can survive. I'd say that upwards of 30% of people living in cities are pretty much walking dead. They're debt zombies and don't know it. They're controlled by TPTB, yet continue to buy into the lies because they see no other alternatives.

The only rational choice is to opt out, though I cannot see that as a viable option for anyone in their 20s or 30s, though I do see some wise younger people (very few) getting into farming or moving out of the cities at least. I'd hate to be young today. The future looks pretty grim. In some ways, growing old has advantages, like, people don't expect much from you. I'll take that, thank you.

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