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California Leads Housing Slowdown As Case-Shiller Home Prices Decline For 4 Months In A Row
Following misses in yesterday's Markit Service PMI, Existing Home Sales and the Dallas Fed report, and today's Durable Goods numbers, we just made it a pentafecta for misses in US econ data, when the just released August Case-Shiller data for August confirmed once again that US housing is rapidly slowing down, when the Top 20 Composite Index (Seasonally Adjusted) posted another decline in August, its fourth in a row, declining by -0.15% and missing expectations of a modest 0.2% rebound (following last month's -0.5%) decline. The best summary of the situation came from S&P's David Blitzer: "The deceleration in home prices continues... The Sun Belt region reported its worst annual returns since 2012, led by weakness in all three California cities -- Los Angeles, San Francisco and San Diego." But who cares what the birth (and death) place of every housing bubble is doing, right?
This is what Case-Shiller Month over Month data looked like:
And Y/Y:
More from the report:
“The large extent of slower increases is seen in the annual figures with all 20 cities; the two composites and the national index all revealing lower numbers than last month. The 10- and 20-City Composites gained 5.5% and 5.6% annually with prices nationally rising at a slower pace of 5.1%. Las Vegas continues to see a sharp deceleration in their annual home prices with a 10.1% annual return, down just below three percent from last month. Miami is now leading the cities with a 10.5% year-over-year return. San Francisco, which has shown double-digit annual gains since November 2012, posted an annual return of 9.0% in August.
“Despite softer price data, other housing data perked up. September figures for housing starts, permits and sales of existing homes were all up. New home sales and builders’ confidence were weaker. Continued labor market gains, low interest rates and slower increases in home prices should support further improvements in housing.
And this is how the 20 major MSA's did in August:
In short: absent another major housing stimulus, one can stick a fork in even this latest fake housing, economic, and finally, market "recovery."
Source: Case-Shiller
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"Now is a great time to buy or sell a house." - NAR
No, now is the best time to buy or sell a house.
Great Flashback:
http://themessthatgreenspanmade.blogspot.com/2006/11/nar-has-much-more-work-to-do.html
Best Flashback:
http://photos1.blogger.com/blogger/1783/1012/1600/davidlereah.jpg
Kill the commission!!
But, it's still a good time to buy right?!?! The NAR told me so.
Looking at the chart, all of the year to year changes are positive. It could turn into a rout, but right now it isn't.
Now is a great time to kick a realtor in the nuts.
"And here we have the 2nd bedroom closet. As you can see, these are
bi-fold doors, and here's where you'd put your hangers. My commission is 6%, by the way. Trust me, this house is a steal, and I should know, because I'm is highly trained, professional RealtorTM, so w hen can you close?"
I would rather use buttons on a laptop than a realtor
"Now is a great time to buy or sell a house." - NAR
Someone has to sell for someone else to buy.
Time for some of that magic fairy pixiedust Moonbeam Jerry.
I've said it once, I'll say it again; The housing bubble is NOT over until we have a peak to trough decline of 90% (minimum). Prepare accordingly. ;-)
The currency will be destroyed before that ever happens.
Ah, I see; win-win. ;-)
I keep saying that I'm going to buy some land, outside of town - maybe it's getting time where the prices will fall in line. A great time to buy or sell some land, I bet.
depends on the state taxes. In some states, there is no property tax, others (like california) not so much...
Just wait...it'll get super cheap!
In the vast majority of cases, and especially in a downturn, there is no worse investment than vacant land. Period.
It goes both ways, is it better to buy land you plan on keeping a significant amount of time in an upturn? I could wait for the apocalypse and just set up shop for the cost of ammo and fortifications.
Well, they could just tax it right away from you, no? Welcome to your apocalypse. ;-)
yup...the poor do it with out guns,ammo and fortifications..its called squatting...
Why?
There's no ROI (in fact it's a sink). In any 'correction' the tier to watch is the condo/multi-family dwelling units. As they correct, you will see other tiers follow (albeit at a later point in time, with the top tier following much later [in progress]).
Time for the daily ebola thread?
"Ignore that Case-Shiller behind the curtain. I am the all mighty OZ." - Yellen
So ummm...who's floating this turd of a market for the FOMC meeting? https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=Logarithmic&chdeh=0&chfdeh=0&chdet=1414526400000&chddm=1153&chls=IntervalBasedLine&cmpto=NASDAQ:ZIV&cmptdms=0&q=NYSEARCA:SPY&ntsp=1&ei=95pPVKCwJMf1qAHquYDQBA
Let me know when DC housing crashes, this will be the only sign we are healing
Must be a bitch trying to sell a $700,000 house when you are surrounded by average Americans making $28,000 a year...
I remember a time when all you had to do was prove you had a job for that 28K for a 700K mortgage, I also recall at least 5 companies fighting over that signature...
And santelli's outrage people couldn't pay their mortgage..
They would roll out Greenspan, who would talk for an hr. and not 1 person in earshot could tell you what the fuck he said..
It was an exceptional time..
Here in Lafayette La postage stamp lot read they don't even include lot size add in insurance which is super expensive due to being south of I-10 and they putting then up in 6 /8 weeks
http://m.realtor.com/#details?property_id=8586401974
Now that is a nut to crack both would have to pull in some serious coin to pay that note and the Infinity and the Escalade and private school .....there is nothing here that warrents that kind of price no mountains , lakes, parks .....fucking sugar cane fields....
To be fair, they list the approximate lot size as "56 x 121." Qualifies as postage stamp. I am intrigued by "4th bedroom able to be used as a ... walk-in pantry."
And markets levitate, just 'cuz'.
Transitory.
Buy with both barrels, bitchez.
That is all.
The state is running out of water...why the fuck would anybody want to move there now? Plus, volunteering to pay upwards of 50%+ of your total income in federal, state and local taxes and fees is insane.
Thanks..
And i thought Jersey was fucked up...
It is
Prop 13, so what. They will get it from you one way on another.
People in California are getting picky all of a sudden and want water with their walls, wires and roof.
House flippers in the rush now!
New cuts in already shabby job alert!
Reverting to the mean is going to be painful for those who beleived the propaganda, "house prices only go up."
As long as banks keep sitting on inventory, prices will likely "stick" to a "new normal" range.
To me the next act of this drama are the local govs desperate for revenue. It will be interesting to see how well tax increases fare with the upcoming election.
Another blogger whose name rhymes with Build MyRide has this headline--"Case-Shiller: National House Price Index increased 5.1% year-over-year in August"
So, what's really happening, as I really need to get into debt to buy a house; then take out a HELOC and finally a reverse mortgage.
mc Bride is a fucking moron!
Dont blame the realtor.... We are all trying to earn a living like everyone else in the 99%.
Realtors are usless fucking middlemen. Cut them the fuck out.
I'd have thought that lots of houses would be needed to accommodate all those fine 'New Americans' streaming over the border into Kalifornia?
The problem with the majority of realtors is that they just want to make a sale. The rarely try to find the best deal for their clients on the buy or the sell side.
re: "best deal"
Bingo. Below I posted the reasoning as to why that happens.
The problem... is that they just want to make a sale.
Of course, who doesn't? If they tell a client it's a shitty deal, they lose the sale. It's up to the buyer to do his homework, caveat emptor. Salesmen are there to make money, not educate.
Besides, it's the seller who hires the broker, so he's doing is job, working for the principal.
The wonderful thing about raw land is it's so ... mmm ... liquid, right?
I sat on my RE for 4 1/2 years waiting for it to sell. Adjusted the price 5 times. With the coming downturn raw land and perhaps many rental properties will experience much pain. It's the way ll markets work ... ups and downs. The reason RE never completed corrected this time is b/c of massive Fed manipulation.
WTFN?
Freakonomics has a good article on realtors' interests. Spoiler alert...they maximize their own profits when selling their own home...not necessarily yours.
https://www.youtube.com/watch?v=17jO_w6f8Ck
Oh...and I'd like to take this opportunity to thank my last realtor for missing the fact that my 4BR is actually perked for 3BR. Fortunately, when I went to put it on the market, my new realtor quickly picked up on that little nugget. I should probably thank my attorney too.
It's hot.
I'm thirsty
What I see is a market exploding with fraudulent credit, it stalls, then falls back to Earth, it is boosted back up with huge injections of printed money, wobbles around and gains some altitude, and is once again about to stall and plummet. Either gonna need larger injections of printed money to keep this one up or it is going down.
I'm a Real Estate Developer and a Realtor (don't try to kick me in the nuts, I'll shoot you). It is the truth that we have lost complete control of the Real Estate Market locally and nationally. This was caused by politicians who thought if folk's home prices went up because of artificial stimulus the electorate would keep electing corrupt polititicians to keep the party going (& yeah, the NAR had a hand in that). It worked. It worked really really well! It would not have been my choice though. I think the Gub'met has no business in home financing or TBTF banks. It has no business setting underwriting guidelines for home or any other type of loan. The market used to do this at a net tax benefit to the tax payers, instead of today's insane liability to the taxpayer.
All of that said, don't blame me for selling your junk houses for more than they are worth! I've yet to hear of a seller who says: "you know that just sounds way too much for my house! Let's not inflate the market any more. Sell my property for less please.....".
You own the greed, not me.
Buckling the helmet down tight for incoming rounds.......
I remember a lawyer saying that everyone hates lawyers until they need them. But the reason we need them is because they actively made a system that requires huge payments to them for basic simple services involving an important business of life and society.
Most people dislike lawyers, bankers, politicians, and realtors for a reason. They're essentially state sanctioned thieves. Lying to yourself and saying it is everyone else's fault might make you feel better though.
"But the reason we need them is because they actively made a system that requires huge payments to them for basic simple services involving an important business of life and society."
Technology is changing the way lawyers and Realtors interact with clients and the marketplace. You have never had the opportunities you have today to bypass direct representation. In every market you can opt to enter your listing yourself, and bypass the Realtor completely. The net cost for allot of functions are going down dramatically because of systems like "Legal Zoom" in the case of lawyers, and Zillow/Trulia in the case of real estate representation. My brothers and sisters at NAR used to have the information tied up but we don't now. In most cases it is greed that drives folks to hire Realtors. Rightly or wrongly people perceive that they will net more money if they hire a Realtor, or a lawyer, than they will if they handle it themselves.
The Real Estate Business is changing and becoming more consumer freindly. That is a good thing.
If agents are going to be part of the transaction, then buyer's agents should be paid commission based on the amount they save a buyer. Something like the buyer's agent gets 20% of what they save their client. If the final price is 10% below asking, the agent gets 2%.
This model will never happen because every participant benefits from high prices (except the buyer), especially government. The govt is so dependent on property tax revenue that even slight decreases in RE value leave govt hugely exposed.
Buyers are free to negotiate the buyer's agent's fee any way they wish. It is perfectly legal, as far as I know. The buyer wants to be successful in a purchase so they aren't going to get a big piece of price carved off when other buyers are competing for the same property, at market price.
The buyers should interview their agent and other competing agents to determine who will do the best possible job for them. Allot of buyers today spend more time studying their local market than their agent does. Because of this I've had a few demand the buyer's agent commission to represent themselves. IF the seller agrees that's okay by me. If the seller does not agree, they want that money, some sort of agreement must be settled otherwise. Strictly speaking, the real estate agents are allowed to negotiate fees without much interference from the state. That is good for everyone because we have allot of knowledgeable agents who work for a fairly nominal fee for the parties involved. Ask around before you hire!
The broader problem with the market place, nationally, is the gub'met's interference in financing. Which drives "pricing by payment" instead of traditional pricing models that look at the value of money v. net purchase price. This is where we have lost our way and we find people paying $1,000,000.00 for a two bedroom fixer upper in the Bay area.
We in the real estate business own our share of these problems because of our participation in allowing the all mighty freddie and fannie own the financing market. NAR supported this because they felt it was in our short term interest. Long term it is destroying value and creating a situation where the losses are eaten by the taxpayer. That is unconscionable.
Elections matter. Who is lobbying who matters.
Just filled out my ballot in CO and didn't see a single name on it that I could enthusiastically support. Bunch of hacks.
And the RE developers, here, are like vultures hovering over Denver, hoping for a handout. City of Champions, FYI?
I up arrowed you. We need to get the gub'met's out of the marketplace (s). Investments of all types should be on their own merits without any possibility of TBTF bailout.
Thank your stupid treacherous representatives for the ghettoization of California. Thank them hard.
Welfare forever, Section 8 housing, and the all wonderful "sanctuary state" mentality killed California. You elected those politicians not the rest of US. YOU OWN YOUR SLOVENLINESS! Not US.
34% of all welfare recipients live in California. California only has 12% of the population:
http://www.utsandiego.com/news/2012/jul/28/welfare-capital-of-the-us/
I wasn't referring to just the spies, traitors, good fellas and suckers in California. If you think this is only happening to "those fruits & nuts over in California" you're in for a nasty surrpise. I bet you even believe the democrats and republican cronies differ in some significant way.
Pay attention Zitte. The adults are having a conversation.
Not with you, you bore.
at least they've got lots of crops and oodles of water
Your House and Price:
Buying a house to live in is typically an emotional transaction, but it shouldn't be. Many times it would be best to rent v. buying. There are many good reasons to buy a house but not everyone needs to own. Also, you can time the real estate market. Wait for the bubble to pop before you enter, and if making money is the prime driver for your owning a house, get out before it pops next time.
Just a thought...........
I used to be a house millionaire then 2008 happened, now I'm just a thousandaire...Zillow says so.
There has been new housing built here in Vegas and it apparently sells but the commercial stuff that Lehman abandoned is still sitting there. Occasionally I'll see a couple of workmen walk the steel skeleton but nothing seems to be happening.
My guess is that malinvestment in housing is less risky than malinvestment in commercial.
Mel Watt gonna fix it.
Ok. Somone let me know when home prices here in South Florida come back to reality, because between the banks and foreigners buying everything up at list or higher with cash, that has left the retail buyers SOL, with no inventory and no chance of getting anything reasonably priced. Anything under $400k here is a shack or in an area that needs bars on the windows. Friends are buying million dollar homes like buying candy. Homes are selling in days here.
Rents have gone up 20-30% in 3 years.
It's crazy but not everywhere is bust.