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March Case Shiller Misses Expectations: Housing Set For Quadruple Dip

Tyler Durden's picture




 

Following the now long-gone LTRO induced risk ramp through March, many of the C-grade economists out there predicted that housing would bottom in March (this time for real) and it would be smooth sailing from there. Alas, the just released March Case Shiller data puts this latest speculation very much in doubt (once again), following a miss of consensus expectations in the Top 20 Composite of a 0.20% increase, printing at half that, or 0.09%, and more importantly, a decline from the February rate of increase, which was 0.15%. The non-seasonally adjusted number declined by 0.03%, the 7th consecutive drop in a row. All this begs the question: did housing just quadruple dip, with a February local extreme in the Sequential rate of change. As the chart below shows, we had comparable peaks in the summer of 2009, in April 2010, and again in April 2011, following which the downward slide resumed every single time once the temporary benefits of monetary and fiscal easing subsided. Also, recall that March was the last month receiving benefits of a record warm winter: in effect a mini demand pull program. And now comes the hangover. Bottom line: based on a broad index, housing is about to decline once again, and make a total joke out of all those who, yet again, made "bold" annual housing bottom predictions.

From the report:

The national composite fell by 2.0% in the first quarter of 2012 and was down 1.9% versus the first quarter of 2011. The 10- and 20-City Composites posted respective annual returns of -2.8% and -2.6% in March 2012. Month-over-month, their changes were minimal; average home prices in the 10-City Composite fell by 0.1% compared to February and the 20-City remained basically unchanged in March over February. However, with these latest data, all three composites still posted their lowest levels since the housing crisis began in mid-2006.

 

In addition to the three composites, five cities - Atlanta, Chicago, Las Vegas, New York and Portland - also saw average home prices hit new lows. This is an improvement over the nine cities reported last month.

 

While there has been improvement in some regions, housing prices have not turned,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “This month’s report saw all three composites and five cities hit new lows. However, with last month’s report nine cities hit new lows. Further, about half as many cities, seven, experienced falling prices this month compared to 16 last time.

 

“The National Composite fell by 2.0% in the first quarter alone, and is down 35.1% from its 2nd quarter 2006 peak, in addition to recording a new record low. The 10- and 20-City Composite mimic these results; also down about 35% from their relative peaks and hit new lows.

 

“There are some better numbers: Only three cities – Atlanta, Chicago and Detroit – saw annual rates of change worsen in March. The other 17 cities and both composites saw improvement in this statistic, even though most are still showing a negative trend. Moreover, there are now seven cities – Charlotte, Dallas, Denver, Detroit, Miami, Minneapolis and Phoenix – where the annual rates of change are positive. This is what we need for a sustained recovery; monthly increases coupled with improving annual rates of change. Once we see this on a broader level we will be able to say the market has turned around.

 

“The regions showed mixed results for March. Twelve of the cities saw average home prices rise in March over February, seven saw prices fall and one – Las Vegas – was flat. The Composites were largely unchanged with the 10-City down only 0.1% and the 20-City unchanged. After close to six consecutive months of price declines across most cities, this is relatively good news. We just need to see it happen in more of the cities and for many months in a row. Since we are entering a seasonal buying period, it becomes very important to look at both monthly and annual rates of change in home prices in order to understand the broader trend going forward.”

As a reminder, all of the above is really generically worthless, because as Zero Hedge explained, America has not one, but four housing markets, with the bottom and the top presenting the fully indicative bid and ask depending on how motivated the seller is. For now, those holding at the bottom: bank distressed properties and refusing to sell. Soon they will have no choice but to.

 

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Tue, 05/29/2012 - 09:25 | 2471305 veyron
veyron's picture

What's CNBC's take on this?

 

Oh yeah, FB options start trading ...

Tue, 05/29/2012 - 09:32 | 2471327 Element
Element's picture

How about this:  "Next month for sure!"

Tue, 05/29/2012 - 09:44 | 2471360 mayhem_korner
mayhem_korner's picture

 

 

They're being real subtle today...they refer in the headlines to a post-crisis low.  It would seem somewhat of a Sphinx riddle for numbers to become worse than the post-crisis lows and still refer to it as 'post-crisis'.

Tue, 05/29/2012 - 10:24 | 2471532 RazvanM
RazvanM's picture

This is called "elastic defense". The prices are in retreat mode just to pop up with more power. Green shots, green shots!

Tue, 05/29/2012 - 11:28 | 2471813 Bunga Bunga
Bunga Bunga's picture

And there is soooooo much money on the sidelines just waiting to buy in.

Tue, 05/29/2012 - 10:53 | 2471683 Rich Bagg
Rich Bagg's picture

Orange County California is skyrocketing.  Multiple offers above asking price.  

Tue, 05/29/2012 - 11:08 | 2471735 beachdude
beachdude's picture

Dipped in FB this morning with the July 25 puts... lots of volume already.

Tue, 05/29/2012 - 09:25 | 2471306 GetZeeGold
GetZeeGold's picture

 

 

 

 

Missed it by jiiiiiiiiiiiiiiist that much.

 

Tue, 05/29/2012 - 10:03 | 2471433 ArkansasAngie
ArkansasAngie's picture

No mark to market ... no bottom.

Riding Bernanke's 2% inflate our way out of this is going to require a long time line.

STick it in your ear Ben

Tue, 05/29/2012 - 09:25 | 2471307 slaughterer
slaughterer's picture

...quintuple dip, sextuple dip... we are doing pretty good with that "change and hope"

Tue, 05/29/2012 - 09:27 | 2471312 Cognitive Dissonance
Cognitive Dissonance's picture

Missed it by >---------that---------< much.

http://www.youtube.com/watch?v=oPwrodxghrw

Tue, 05/29/2012 - 09:31 | 2471324 Hulk
Hulk's picture

But NAR states we have turned the corner...

Tue, 05/29/2012 - 09:32 | 2471328 mayhem_korner
mayhem_korner's picture

 

 

They confused the lip of the frying pan with a "corner"...

Tue, 05/29/2012 - 09:40 | 2471352 Cognitive Dissonance
Cognitive Dissonance's picture

Very nice. Can I steal that from ya? :)

Tue, 05/29/2012 - 14:31 | 2471367 mayhem_korner
mayhem_korner's picture

 

 

Of course...just send the royalty check care of Bernie Madoff.  (he's my cell mate)

Tue, 05/29/2012 - 09:55 | 2471397 Normalcy Bias
Normalcy Bias's picture

The NAR is bullish on slots in Tent Cities!

Tue, 05/29/2012 - 10:21 | 2471522 goldcoastgirl
goldcoastgirl's picture

NAR is a bunch of liars. 

 

Tue, 05/29/2012 - 09:29 | 2471315 Stax Edwards
Stax Edwards's picture

We should bounce along the bottom here for a couple of years or better. For the most depressed markets price up or down (mom) is a function of how motivated banks are to unload inventory.

Tue, 05/29/2012 - 09:43 | 2471358 Number 156
Number 156's picture

What would be the motivation to let go of any of that housing inventory? Their balance sheets probably have it priced in at 2007 prices. 

Tue, 05/29/2012 - 09:53 | 2471385 MachoMan
MachoMan's picture

The only reason would be if they attempt to run the gauntlet, with the presumption that they have a manageable nonperforming asset base...  I could see this as a possibility for more mid-sized institutions.  In other words, conceptually, the TRESERVE purported that should the backstop last long enough, it will allow the crippled banks to mend themselves back to health or at least a position sufficient enough to fend off most wolves.  The problem was that in throwing money around like zoolander models throw gasoline, the TRESERVE never forced them to write down bad loans...  (must be nice).

In short, the only reason to do it is the notion of survival...  which, in this case, butts heads with financial benefit.  For those institutions that can weather the storm (probably none of the big boys), it may provide a significant opportunity for market share on the back side.  If they fall along the way, they will be cannibalized by the TBTF in an effort to shore up systemically important balance sheets...  the trick is whether enough little guys can die in the mean time to keep some semblance of liquidity (NOT SOLVENCY) to the big boys.

For those that started this approach in 2008/2009, they've had quite a few years to dump bad apples. 

Wed, 05/30/2012 - 01:30 | 2474280 prodigious_idea
prodigious_idea's picture

"never . . . write down bad loan"

It isn't a loan after foreclosure.  And of course the banks write down the asset when it gets reclassified out of the loan portfolio and into a non-performing asset (with an appraised value lower than the loan amount).  But the first thing that happens is that the bank reverses all the accrued interest, fees and other payments (e.g. prop.taxes), which immediately hits the P&L.

Tue, 05/29/2012 - 09:55 | 2471396 FEDbuster
FEDbuster's picture

Vacant homes (the shadow inventory) don't age well, even when winterized by the banksters.  I have a couple of formerly really nice homes near my place that have been empty for 3+ years.  All the landscaping is dead, weeds have taken over.  No for sale sign, only "winterized notices" posted in the windows.  There are millions of homes around the US in similar condition falling in greater disrepair the longer they sit empty.

Tue, 05/29/2012 - 09:28 | 2471316 surf0766
surf0766's picture

This has to be the bottom. Cramer? Cramer? Anyone seen Cramer?

Tue, 05/29/2012 - 09:35 | 2471335 Money 4 Nothing
Money 4 Nothing's picture

He was literally crying earlier on CNBC, seriously, tears and all. hence the name, Crymore.

Tue, 05/29/2012 - 09:31 | 2471319 duo
duo's picture

As companies prepare for taxageddon and a second Obama term, they will lay off as many people as they can.  This will set the consumer confidence downward spiral in motion.  The Bernank still doesn't understand that $8/hour part-time workers don't buy houses no matter how low interest rates are forced by debt monetization.

Tue, 05/29/2012 - 09:32 | 2471325 LawsofPhysics
LawsofPhysics's picture

Still believe the two-party lie?  Is the same Bernanke that was appointed by Bush?

Tue, 05/29/2012 - 09:58 | 2471410 FEDbuster
FEDbuster's picture

After the iceberg is hit, it doesn't matter who the captain of the ship is.  Even my man, Ron Paul, couldn't save the ship with a dysfunctional crew.  The ship is going down, now the only question is who will survive.

Tue, 05/29/2012 - 10:18 | 2471507 LawsofPhysics
LawsofPhysics's picture

You are correct.  As ironic as it is in the context of the recent "market" revalations, allm one can do is hedge accordingly.

Tue, 05/29/2012 - 11:07 | 2471733 ElvisDog
ElvisDog's picture

Now LawsofPhysics, where in the post you commented on was there anything of a partisan political nature? It is you who seem to be the kneejerk red-team vs blue-team guy. Politics aside, preparing for a 2nd Obama term is the smart move by banks and companies, because it is the most likely outcome at the moment. What I disagree with is that Obama and Congress will allow all the tax breaks really expire. My bet is that they will roll them over similar to how the "temporary" payroll tax cut never goes away.

Tue, 05/29/2012 - 09:30 | 2471321 monopoly
monopoly's picture

We are just bouncing along the bottom before the next leg down. With interest rates at record lows for at least another year, why bother to rush into buying. And notice how the idiot channel does not even talk about housing anymore. They just show the numbers at the bottom of the screen and move on to more important stories. Rigghhtt!!!

Tue, 05/29/2012 - 09:31 | 2471323 LawsofPhysics
LawsofPhysics's picture

I'll keep saying it until everyone understands;  we will be "beating expectations" all the way down...

Tue, 05/29/2012 - 09:33 | 2471330 SheepDog-One
SheepDog-One's picture

The weight of some guys 'expectations' sets the bar? And who are the expectationers anyway? Like wizards of old....whatever they say goes.

Tue, 05/29/2012 - 09:46 | 2471348 mayhem_korner
mayhem_korner's picture

 

 

The longer one sets at the bar, the lower the expectations get...especially regarding weight.

non sequiturus maximus

Tue, 05/29/2012 - 09:32 | 2471329 Temporalist
Temporalist's picture

Quadruple is my favorite type of dip.

 

Escape From New York? High-Taxing Empire State Loses 3.4 Million Residents in 10 Years

"New York State accounted for the biggest migration exodus of any state in the nation between 2000 and 2010, with 3.4 million residents leaving over that period, according to the Tax Foundation."

http://cnsnews.com/news/article/escape-new-york-high-taxing-empire-state-loses-34-million-residents-10-years

 

 


Tue, 05/29/2012 - 09:34 | 2471331 tuttisaluti
tuttisaluti's picture

With this stick house crap they build, there is still much room to the downside. Still way overpriced.

Tue, 05/29/2012 - 09:47 | 2471370 adr
adr's picture

Oh come on $15k of materilas built like a Chinese economy car is definately worth $450k :)

A good 80 year old home can sit unoccupied for a few years without suffering major structural damage. 99% of the homes built during the bubble will be lucky to stand 20 years with proper care. A McMansion sitting for five years in a modern development with no resident care will pretty much need to be condemned. The mold alone would require a biohazard suit just to do an inspection.

Tue, 05/29/2012 - 09:34 | 2471334 midtowng
midtowng's picture

Housing probably is nearing a bottom, but that doesn't mean it won't roll around on that bottom for many years to come.

Tue, 05/29/2012 - 10:03 | 2471431 Vince Clortho
Vince Clortho's picture

As mentioned by several contributors here, there is no way for anyone to call a housing bottom as long as banks are withholding toxic properties off the market.

Tue, 05/29/2012 - 09:38 | 2471343 SmoothCoolSmoke
SmoothCoolSmoke's picture

Buck Fernankie getting ready to unhook his bro (or is it a manzier?) and let the market suck his tits of liquidity?

Tue, 05/29/2012 - 09:38 | 2471347 Toolshed
Toolshed's picture

Hey......where's Lee Adler? Shouldn't he be on here via Ilene enlightening us that now housing has really truly certainly absolutely bottomed and how bullish this all is and it's time to buy for sure? Or did the NAR cut his funding?

 

Tue, 05/29/2012 - 09:40 | 2471351 adr
adr's picture

So free money from the Fed is good for propping up the housing market for a few months as speculators use the cash to buy "investment" homes.

The US is going to be like China. Someone owns all the property but nobody will be living in it. In the past month four homes sold in my immediate area. Every one was an all cash deal. Still haven't seen a moving truck.

We won't see the real housing bottom until the Fed is reigned in. The housing "recovery" is just like the stockmarket. Propped up with bullshit benfiting only the most connected.

Tue, 05/29/2012 - 10:01 | 2471423 Vince Clortho
Vince Clortho's picture

These proclamations of "bottoms" are sheer nonsense.  As long as banks are holding toxic, deteriorating properties out of the market, there can be no true discovery of where the housing bottom actually is.

There is no reality.  It's all bullshit propaganda and trying to use the media and twisted statistics to convince people to believe in a lie.

Keeping the banks flush with free cash is not helping the housing problem.

Tue, 05/29/2012 - 09:40 | 2471353 BandGap
BandGap's picture

No shit, listen to any "news" radio station these days. Just this morning more sunshine up our asses about "turning the corner" in housing.  Last month it was that certain markets have "stabilized". This is nothing short of hilarious, take Detroit for example. The houses CAN'T go any lower in these cities. Hell, Detroit first contracted, and now sells what were once neighborhoods as "urban farms". I was just in Atlanta, no farms but lots of for sale signs.  Unbelieveable.

Tue, 05/29/2012 - 09:53 | 2471387 Kinskian
Kinskian's picture

Lots of obsolete farm equipment in Detroit and Atlanta.

Tue, 05/29/2012 - 09:56 | 2471400 adr
adr's picture

Oh Detroit can go lower. Homes were selling for $1. The government can pay certain residents to occupy the homes.

Of course why would they want to take a home nobody wants over a brand new $250k per unit value government contracted built Testa welfare park.

You wouldn't believe what government housing looks like today. If you picked up the new urban development in Akron, OH and stuck it in California, it wouldn't look out of place with $2million per unit as the list price.

What is also hilarious is that a building that was supposed to be filled with million dollar condos was just bought by the city because the developer declared bankruptcy. The only use the city has for it is low income housing. "Damn, I gots myself da penthouse yo. Dat Obama tha shit."

Tue, 05/29/2012 - 09:50 | 2471375 Snakeeyes
Snakeeyes's picture

Case-Shiller is old news. FNC 20 came out last week and is showing the same thing.

http://confoundedinterest.wordpress.com/2012/05/29/case-shiller-house-price-index-rises-0-09-mom-phoenix-az-leads-the-recovery/

All house price indices are showing upticks (Zillow, CS, FNC, FHFA). 

But we are entering the Summer Seasonal when house prices typically rise, only to give back ground in the Fall/Winter. See charts.

Tue, 05/29/2012 - 09:59 | 2471413 Monedas
Monedas's picture

How many Angstroms wide is a red spectrum pussy hair !  They missed it by more than that !      Monedas   1929    Comedy Jihad Angstrom Angst Caught In My Green Spectrum Moldy Dentures

Tue, 05/29/2012 - 10:18 | 2471438 Arnold Ziffel
Arnold Ziffel's picture

LOS ANGELES (AP) — Across the vast Pacific, the mighty bluefin tuna carried radioactive contamination that leaked from Japan's crippled nuclear plant to the shores of the United States 6,000 miles away — the first time a huge migrating fish has been shown to carry radioactivity such a distance.

The levels of radioactive cesium were 10 times higher than the amount measured in tuna off the California coast in previous years.

 

http://news.yahoo.com/radioactive-bluefin-tuna-crossed-pacific-us-190121...

I'm waiting for those six-winged chickens Cali will start growing.....I just went 'short' chicken wings there will be such an oversupply.  But on the bright side, any Cali restaurant serving these Bluefin tuna fish should get "glowing" reviews.

Tue, 05/29/2012 - 12:14 | 2472037 bonderøven-farm ass
bonderøven-farm ass's picture

No worries...!  The FDA claims there's nothing to worry about.  Hey Bubba, Unkie Sam's gots yer back.....!

 

 

Tue, 05/29/2012 - 10:07 | 2471444 IAmNotMark
IAmNotMark's picture

I sold in 2005 and have been renting since then.

I close on a nice place next month.  The monthly nut is less than what I'm paying now in rent.

The price of the house will go up/down/sideways for the next several years.  The mortgage payment will stay the same.  I'm hoping the parasites don't raise property taxes too much!

Tue, 05/29/2012 - 10:21 | 2471520 Monedas
Monedas's picture

Case-Shiller......sounds like a government attorney ?  Monedas   1929    Comedy Shill For The PTB

Tue, 05/29/2012 - 10:26 | 2471548 prodigious_idea
prodigious_idea's picture

yaaaawwwwwwwwwnnn

Tue, 05/29/2012 - 10:50 | 2471667 Bitchin Bear
Bitchin Bear's picture

Don't these people get it?  The housing market will  never be the same - ever.  The bubble was spawned by criminals and greedmeisters who got their piece while the getting was good and now are bitching and crying over the results.  Hell, my hair stylist is 25 and even she gets it.  She and her husband are so underwater in their mortgage - but as long as they are working they will try to survive and maybe remodel. She holds no hope that the future will  ever be any different. Pretty sad. As stated other places, so  many of these "reports" are juxtaposed in such a way to blow sunshine up our ass.  Here in the Atlanta suburbs you don't see as many for sale signs as you once did - simply because people have taken them off the market.  Just like unemployment numbers where people have given up.  There are isolated pockets in town that are still selling well but drive beyond the trendy demarcation line of yuppyville into the inner city and it's just as bad as Detroit. 

Tue, 05/29/2012 - 11:08 | 2471734 cdskiller
cdskiller's picture

To understand if housing has hit bottom, go house shopping for a couple of months. You will see utter crap, built butt up next to other total crap, with the deafening roar of major highways overhead, that in 2007 was priced at or bought for $750,000, now 33% less, asking for $500 thousand with $15,000 in yearly taxes. If you are that big of a loser or that desperate, then go to a bank and try to get a mortgage for $400,000 based on your $100-150,000 yearly income, and watch them laugh. Then think about how many families there would need to be that are sitting on $500,000 in cash to prop up a market and lending environment like this. The problem is, of course, the country is full of houses like that one. Houses that are not worth a single penny more than they were in 1998, when this one was bught for $150,000 by a middle class family with yearly annual income of $60,000, using a loan for $125,000, the biggest mortgage they could receive at the time. The house needs to go down in price another 70%. That's the bottom we need to reach and the bottom we will reach.

Tue, 05/29/2012 - 13:18 | 2472382 newworldorder
newworldorder's picture

And still our noble press is hell bent on leading more of us to the slaughter.

http://finance.yahoo.com/news/spring-revival-americas-housing-market-191828180--sector.html

Tue, 05/29/2012 - 13:07 | 2472299 W10321303
W10321303's picture

Obsession with Europe just lets the sheep off the hook about the ALL AMERICAN rot that created it all....

, Lehman Whistleblower , Matthew Lee , Ernst , Lehman Brothers Bankruptcy , Business News

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wsj.com:

Lehman Brothers Holdings Inc. ousted a whistle-blower just weeks after he raised red flags about the securities firm's accounting in 2008.

Matthew Lee, a 14-year Lehman veteran, was let go in late June 2008 amid steep losses at the firm as it tried to maneuver through the global financial crisis. Earlier that month, he had raised concerns with Lehman's auditor, Ernst & Young, that the securities firm was temporarily moving $50 billion in assets off its balance sheet

Tue, 05/29/2012 - 13:09 | 2472315 W10321303
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Lehman whistleblower lost his job weeks after raising alarm ...   www.guardian.co.ukBusinessLehman BrothersCached - Similar You +1'd this publicly. Undo

Mar 16, 2010 – A worried accounting executive at Lehman Brothers, who raised the alarm about what he saw as dubious number-crunching at the doomed ...

Tue, 05/29/2012 - 13:12 | 2472335 W10321303
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    May 14, 2012 – Predator Nation is the tiger cub that resulted, as Ferguson turns to print to continue his indictment of the predatorial elites who run America, and ...

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