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Case-Shiller Index Resumes Decline Following Small Gain To End 2014
Weather-crushed January saw seasonally-adjusted Case-Shiller home prices - and as a reminder Case-Shiller expressly warns not to use seasonal data but opts for raw, unadjusted reporting - rise 0.87% MoM (better than expected), slower than the revised 0.91% gain in December. However, away from the 'make-everything-feel-better' adjustments, home prices slipped in January following December's brief interlude, leaving the index down 4 of the last 5 months. Of course, it goes witghout sayiung that weather was blamed, as they suggest, "unusually cold and wet weather may have weakened activity in some cities." What is more worrisome however, and farcical, is Case-Shiller's ominous warning against rate hikes, "home prices are rising roughly twice as fast as wages, putting pressure on potential homebuyers and heightening the risk that any uptick in interest rates could be a major setback."
Following December's blip, January resumed the falling trend...
Without the seasonal adjustments that make everything feel better: in fact a flat line is the best the market can hope for.
“The combination of low interest rates and strong consumer confidence based on solid job growth, cheap oil and low inflation continue to support further increases in home prices” says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices. “Regional patterns in recent months continue: strength in the west and southwest paced by Denver and Dallas with results ahead of the national index in the California cities, the Pacific Northwest and Las Vegas. The northeast and Midwest are mostly weaker than the national index.
“Despite price gains, the housing market faces some difficulties. Home prices are rising roughly twice as fast as wages, putting pressure on potential homebuyers and heightening the risk that any uptick in interest rates could be a major setback. Moreover, the new home sector is weak; residential construction is still below its pre-crisis peak. Any time before 2008 that housing starts were as low as the current rate of one million, the economy was in a recession.”
As for the breakdown by MSA, San Francisco is back to being the laggard, seeing a 0.9% drop sequentially.

From the report:
Of the nine cities that reported increases, Charlotte, Miami, and San Diego led all cities in January with increases of 0.7%. San Francisco reported the largest decrease of all 20 cities, with a month-over-month decrease of -0.9%. Seattle and Washington D.C. reported decreases of -0.5%.
Clearly the west coast is in desperate need of more PBOC easing and a return of the Chinese buyer.
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Robert Shiller, once a purported respectable economist with prescient views/forecasts on housing market health/dis-health, to whore of cnBSc:
"We recommend no rate rise - ever. Get to work, Mr. Yellen!"
I've probably been more bored than this before.....but I can't remember when.
So much zombie inventory. The game has been to put it on the market s l o w l y
That is reflected in these #'s
Case Shiller is a survey index. They can make it say whatever they want. We are in the age of "anything goes, nothing matters" so when CS reports this shit, you can expect it to be much worse.
Philly housing index coming off multi-year highs
http://bullandbearmash.com/chart/philly-housing-index-weekly-continues-h...
Housing has never come close to recovering from 2006. But when Yellen / The Fed buys housing stocks to fraud the market higher, it appears that housing is doing just fine.
If the banks ever lose their access to free Fed money, then you'll see a shit ton of houses hit the market and prices decrease accordingly. The government keeps propping up these shit bag banks which keep the working man enslaved on housing. There are now generations that can't get into decent housing. What's really insane is that these policies are for the people and paid for by the people.
Japan did the same thing in the 80's. They had a whole load of zombie banks. Eventually, the money ran out and a couple of them went out of buisiness. There will be blood in the streets, you just gotta wait for it.
Let the FED worry about that just BTFD.
"home prices are rising roughly twice as fast as wages, putting pressure on potential homebuyers and heightening the risk that any uptick in interest rates could be a major setback."
An up tick in rate will not be the cause of a major setback. The housing bubble will be the cause of a major setback. The housing bubble distorted the market.
A +15 reversion from the mean, requires a -15 to revert back to the mean.
With 80 million Boomers retiring, (10 thousand per day), wage growth stagnant, student loans becoming the second largest portion of private debt, ACA hitting everyone, and rates at all time lows, how can housing prices rise?
There is quite simply not enough 30-50 something's with money to step up and buy the houses the boomers have to unload to downsize. Throw in property taxes in the big cities, suburbs and you have some real problems.
Wages better start going up or we're going to have another major bust.
The Millenials will just move from the basement to the first floor as the Baby Boomer parents die off.
Baby boomers want a smaller place, for the obvious reason that there are fewer people living in the house. They're tired of cutting the grass and fixing the roof. They want a place that's more convenient and easier to take care of. The bonus: They typically lower their housing costs and free up cash either to cover ongoing expenses or finance a new lifestyle featuring more travel, entertainment and spending on health and recreation.
http://news.yahoo.com/where-retirees-want-live-now-145428809.html