Case-Shiller Home Prices Disappoint But Hit New Record High

Tyler Durden's picture

Great news 'Murica - your house has never been worth more than it was in May (according to Case-Shiller's national home price index).

 

On the slightly less silver-lining side of the equation, April's 0.28% gain in price was revised to 0.18% MoM drop and May's proint disappointed at just 0.1% rise MoM.

The 20-city property values index increased 5.7% y/y (est. 5.8%).

All cities in the index showed year-over-year gains, led by a 13.3 percent advance in Seattle, an 8.9 percent increase in Portland and a 7.9 percent gain in Denver.

After seasonal adjustment, Seattle had the biggest month-over-month increase, at 0.9 percent, while New York posted a 0.6 percent decline.

“Home prices continue to climb and outpace both inflation and wages,” David Blitzer, chairman of the S&P index committee, said in a statement. “The small supply of homes for sale, at only about four months’ worth, is one cause of rising prices. New home construction, higher than during the recession but still low, is another factor in rising prices.”

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venturen's picture

the bigger they are....the harder they fall. Just insanity! 

Creepy_Azz_Crackaah's picture

Home prices are the epitome of supply, demand, and inflation (the Fed).

As real income gets crushed due to outrageously high GOVERNMENT college loans and lower paying jobs, demand will go down. Therefore, prices will go down. But the Fed will pump them back up by "printing" money.

sodbuster's picture

Newsflash! Your home is NOT worth more- your money is worth less...........

Shitonya Serfs's picture

Gotta live somewhere. I'd rather rent from the bank than from another person. The first only bothers you when you don't pay; the other one is always there to tell you what you can/can't do.

XBroker1's picture

True in part. Not all of it is inflation if one looks at an inflation calculator (this is also market dependent). Many countries, not just the U.S. have been claiming economic growth, when it's really inflation.

khakuda's picture

The 20-city property values index increased 5.7% y/y

...Sure is a good thing the Fed leaves that out of their fake inflation measures.

graspAU's picture

But what about all the inventory banks keep off the market. There are a few in my neighborhood. 4 month supply, it's probably triple that. Also, I heard years ago that now for appraisals, they yank out distressed property sales (foreclosure and shortsales) from the value they determine. It's just a game. What sucks is when you need a house for your family, you need one. Kind of like holding gold until it goes to the moon. It's an insurance policy and savings, when you need it for a major life event you need it, and can't hold out forever.

Never One Roach's picture

More shakey loans that will fall on the backs of hard working taxpayers when bankers are bailed out like they were under both Bush and Oabam.

Just go into any home builder's office and watch as they push these $750k+ houses onto to people like a car loan asking them how much they can afford each month then come up with a 3% down mortgage the customer obviously cannot afford in the long run.

GodHelpAmerica's picture

Nice. Property taxes also hit a record high then. Enjoy!

Never One Roach's picture

3.6% now in many places.

That's alot of dough on a $500k+ house, esp for those retired people who thought their savings of $250k would carry them thru retirement. They thought the normal savings yield of somewhere around 4% to 6% on that $250k nest egg would be enough.

 

Now grandpa is eating cat food and worried about his future every day.

surf@jm's picture

Yeah, well, I hope these localities enjoy their Chinese homeowners, and their real estate taxes.....

Just wait till the local Bozo politician, who has been sitting on the local board of supervisors for 20 years, loses his election, and board seat to a Chinese national.......LOL!....

PitBullsRule's picture

Whats wrong with that?  You don't like Chinese?  We have lots of Chinese here, and they are fine.  You're just another loser trying to justify why you never bought a house.

Solio's picture

No surprise here, The price of everything go up and up because the dollar value go down and dowwn.

Solio's picture

Yeah QE! Far out man!

Dexter Morgan's picture

Rising residential real estate prices while home ownership rate is at 50-year lows means the demand is coming from foreigners and/or corporations, no?  I'm 61 and I'm renting, for what that's worth.

PitBullsRule's picture

Its worth about 2K a month, to your landlord.

Dexter Morgan's picture

Interesting since he only gets $700 from me.

LyLo's picture

Speaking of house prices:

I know an old guy trying to "refinance," and with it he's getting his house appraised because the last appraisal it wasn't worth as much as he wants.  He bought the house for like $50k in the eighties, and now believes it to be worth at least $250k, and not the $125k it is listed as valued.  It's not fair.

He also is very concerned, because if he can't get the new payment for his various loans lowered, he's not sure he'll be able to afford the taxes.  When he first moved there, it was a cute little town with good access to healthcare facilities.  Now, it's a mid-upper class neighborhood built around a hospital requiring massive infrastructure, surrounded by houses going for at least $125k, with taxes to match.  It's not fair.

His child, now in his 40s, still lives in the bedroom down the hall.  He managed to slip out of the workforce by crying disability, sat down in front of the computer and never got back up.  Now, he's tired of living with dad.  But his disability payoff is the same amount as when it was awarded and the quite generous payments suddenly aren't worth that much at all, while all of the houses in the area are just so expensive.  There's no way for him to move out.  It's not fair.

And somehow, I'm the only one laughing.  They don't seem to think any of that is funny at all.  Sorry; just wanted to share this moment of beauty I encountered yesterday, and figured ZH might laugh with me.

CoastalCowboy's picture

I want to see it plotted against the price of rib-eye steak.

personal109's picture

My guess is that the powers that be artificially keep inventory low to bump up prices. does that mean we are all going to be living in million dollar homes.

Muppet's picture

Heres reality... A $2.5M build, 7500sf, 3.5ac, 9yr old, luxury home in affluent Barrington IL is bank owned and listed in the 800s.  (521larkins.com). 

 

Could it be the $27,000 property tax ?  You think.

 

Many looking at the above say they would cancel their own pending $2M new construction dream.  Look, this excess inventory has to hurt.  Just in this case alone, some builder will like NOT begin a $2M project because of this.  Thats an economic hit.  This market got front loaded and channeled stuffed and now the chickens have come home to roost.

XBroker1's picture

My property taxes aren't even 1% of my property value. Not complaing. And not saying where it is, but I have in the past. I'm closer to .5% than I am to 1%.  I own it free and clear. I have relatives paying 3, 4 and 5% of their home's value in annual property taxes. They're renting but won't admit it.