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May Case Shiller Composite Misses Expectations, Yearly Drop Biggest Since November 2009

Tyler Durden's picture


Remember those June calls after April's (yes, two month delayed) Case Shiller report that housing has hit a bottom? Scratch them. The Case Shiller 20 City composite for May (so why anyone even looks at this is beyond us) just came at -0.05% M/M on expectations of an unchanged print, with the previous revised from -0.09% to 0.44%. On a Year over Year basis the 20 City Composite dropped 4.51% on consensus of a -4.50% drop (the previous -3.96% was revised lower to -4.22%) - this was the biggest drop since November 2009. Washington DC was up 1.3% Y/Y (2.4% M/M) and was the only city to gain on a yearly basis. Minneapolis was down the most: 12%. That said there were some modest improvements in several of the regions: “We see some seasonal improvements with May’s data,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “This is a seasonal period of stronger demand for houses, so monthly price increases are to be expected and were seen in 16 of the 20 cities. The exceptions where prices fell were Detroit, Las Vegas and Tampa. However, 19 of 20 cities saw prices drop over the last 12 months. The concern is that much of the monthly gains are only seasonal." Good luck trying to extrapolate data away from seasonal adjustments: "May’s report showed unusually large revisions across some of the MSAs. In particular, Detroit, New York, Tampa and Washington DC all saw above normal revisions. Our sales pairs data indicate that these markets reported a lot more sales from prior months, which caused the revisions. The lag in reporting home sales in these markets has increased over the past few months. Also, when sales volumes are relatively low, as is the case right now, revisions are more noticeable."


On some more recent data:

“Other recent housing statistics show that single-family housing starts were up moderately in June, and are at about the same pace as a year ago. Existing-home sales were flat in June, reportedly because of contract cancellations and tight credit. The S&P/Experian Consumer Credit Default indices showed a continuing decline in mortgage default rates since last winter. Other reports confirm that banks have tightened lending standards in the past year, making it harder to qualify for a mortgage despite very low interest rates. Combined, these data all support a continuation of the ‘bounce-along-the-bottom’ scenario we have witnessed in the housing market over the past two years

The take home:

“While the monthly data were encouraging, most MSAs and both Composites fared poorly in annual terms. Nineteen of the 20 MSAs and the two Composites posted negative annual growth rates in May 2011. The 10-City Composite was down 3.6% and the 20-City Composite was down 4.5% in May 2011 versus May 2010. Minneapolis posted a double-digit decline in annual rate of 11.7%. The only beacon of hope was Washington D.C. with a +1.3% annual growth rate and a +2.4% monthly increase. We have now seen two consecutive months of generally improving prices; however, we might have a long way to go before we see a real recovery. Sustained increases in home prices over several months and better annual results need to be seen before we can confirm real estate market recovery.”

And an announcement that may put Calculated Risk in a fight to retain his charting business model: S&P has just launched Housing Views: its own blog on the housing market.


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Tue, 07/26/2011 - 09:16 | 1494017 bob_dabolina
bob_dabolina's picture

So now illegal immigrants pay the same tuition rate for American taxpayers? 

Who would have thought 50 years ago there would be more incentives for illegal immigrants, and more taxes/regulations on American citizens? What a country

Tue, 07/26/2011 - 09:31 | 1494059 Spastica Rex
Spastica Rex's picture

Are we supposed to vote down non sequiturs?

Tue, 07/26/2011 - 09:44 | 1494082 bob_dabolina
bob_dabolina's picture

I meant "as" instead of "for. 

Come on, you know what I meant. Are you a college professor that just learned the word "non-sequitur" and have just been dying to use it or what?

Tue, 07/26/2011 - 10:09 | 1494160 Spastica Rex
Spastica Rex's picture

Yeah, maybe I should have said, "thread jacking" instead. Thanks for pointing me in the right direction.

Tue, 07/26/2011 - 10:12 | 1494170 kito
kito's picture

junked for non sequitur thread

Tue, 07/26/2011 - 09:17 | 1494018 wang
wang's picture

Calculated Risk at risk?  LOL

Tue, 07/26/2011 - 09:20 | 1494021 Bodhi
Bodhi's picture

Drove around my local crap town and was disturbed by the number of 'for sale' signs on the houses.  Nobody is buying.  Either that or there is some local disaster nobody told me about yet.

Tue, 07/26/2011 - 09:19 | 1494023 Clueless Economist
Clueless Economist's picture

Hello, I am a receent grad of ITT Tech with an associate degree in Economics.

I am looking for my dream job as an on air TV personality at CNBS.

Which of these men should I sleep with to get that job?

Steve Liesman, Joe Kernan, Jim Cramer, Rick Santilli or Larry Kudlow?

Thanks for the advice!

Tue, 07/26/2011 - 09:23 | 1494037 dbach
dbach's picture

Booo... go away Mrs. Hammy!

Tue, 07/26/2011 - 09:52 | 1494099 Pegasus Muse
Pegasus Muse's picture

They're all fags .... except for Santelli.    

Tue, 07/26/2011 - 12:02 | 1494721 Janice
Janice's picture

Steve Liesman, Joe Kernan, Jim Cramer, Rick Santilli or Larry Kudlow

While I have my own fantasies about Rick Santilli, I would suggest none of the above.  They are all front men for the puppet master in the back room.  In order to get a job, you have to sleep with the troll in the back room and pray that his wife/daughter/mistress/next door neighbor doesn't seek the job you want.

Tue, 07/26/2011 - 09:19 | 1494024 digalert
digalert's picture

This calls for another "cash 4 clunker-home" program.

Tue, 07/26/2011 - 09:45 | 1494088 redpill
redpill's picture

And that's part of what is at play here.  Keep in mind that around this time last year was when the last federal tax credit for home purchases was expiring, so there was a flurry of activity in April-June 2010, which partially hurts the current figures.  While things are still not good, the comparison to the year-ago period makes it look worse than it would have otherwise been.  When we start comparing July over July and later, the numbers should get a bit better in terms of comparison, although obviously absolute volume and pricing are still very depressed and will continue to be so for the foreseeable future.

The stats play out that it was a futile pull-forward of demand that collapsed as soon as the credit expired.  It's actually a good microcosmic example of why central banking and Keynesian money supply expansion is ultimately a failure.

Tue, 07/26/2011 - 09:20 | 1494027 lizzy36
lizzy36's picture

I would like to think this matters.

Maybe tomorrow it will.

For now the real economy and the numbers reflecting the real economy seem to matter not at all.

Their's not to reason why,
Their's but to do and die:

Tue, 07/26/2011 - 09:34 | 1494044 Quintus
Quintus's picture

Spending Cuts to the right of them

Tax hikes to the left of them

Default in front of them

Into the valley of debt

Rode the 535


With apologies to Tennyson

Tue, 07/26/2011 - 10:57 | 1494377 Temporalist
Temporalist's picture

It quite bothers me that I cannot share the Little Rascals "Charge of the Light Bridage" episode because someone owns the rights to it and there are no video clips on the internet.

Why such a piece of television history is so restricted and not shared is a travesty.

Tue, 07/26/2011 - 10:16 | 1494194 SWRichmond
SWRichmond's picture


Patience as we wait for reality to finish asserting itself.

Got popcorn?

Tue, 07/26/2011 - 09:20 | 1494028 spartan117
spartan117's picture

The 10 and 20 index charts look like they want to roll over and hit 75 to 100 in 2012. 

Tue, 07/26/2011 - 09:21 | 1494031 holdbuysell
holdbuysell's picture

O/T - has anyone taken notice that the USD has quietly been approaching its all-time low?

Tue, 07/26/2011 - 09:21 | 1494032 ZeroPower
ZeroPower's picture

Really itching to snap up some US RE soon. Maybe when theres a new administration... will wait it out and see for now.

Tue, 07/26/2011 - 10:43 | 1494316 ElvisDog
ElvisDog's picture

Where were you thinking of buying?

Tue, 07/26/2011 - 09:22 | 1494034 pepperspray
pepperspray's picture

My inlaws just bought a house.  +1 to the upcoming July number.  But now they own 3 houses- including 2 that won't sell.

Tue, 07/26/2011 - 11:03 | 1494403 MachoMan
MachoMan's picture

I guess they're trying to make the losses up on volume?

Tue, 07/26/2011 - 09:23 | 1494036 midtowng
midtowng's picture

This makes no sense. I was assured that the housing market had bottomed and that now was a good time to buy a house. You don't suppose that they lied to me, do you?

Tue, 07/26/2011 - 09:28 | 1494051 Boilermaker
Boilermaker's picture

You have to buy NOW before interest rates go up by 25 basis points and before the house drops in value by 30% AND before they revoke the mortgage interest deduction.

It's all in the numbers.

Tue, 07/26/2011 - 09:25 | 1494041 Cognitive Dissonance
Cognitive Dissonance's picture

In the roller coaster design and build world, they say the second drop is the most exciting because it's usually unexpected.

Here comes a dozy.

Tue, 07/26/2011 - 09:28 | 1494050 Cdad
Cdad's picture

But...but...Cramer said housing bottomed in 2008.  As far as I know, and despite the continued plunge, he is sticking with his call, too.  And his call that the actual numbers at Netflix do not matter, nor does the falling stock price, because Reed Hastings is great.  

Am I missing something here?

Tue, 07/26/2011 - 09:33 | 1494062 Cognitive Dissonance
Cognitive Dissonance's picture

You are missing the narrow mind that supports the ignorance is bliss all-will-be-well mindset. You are also not paid to think this way.

Shame on you for being broad minded. You terrorist.

Tue, 07/26/2011 - 09:53 | 1494107 SheepDog-One
SheepDog-One's picture

I havent even used my Netflix since it started glitching all up, it was on OK novelty at first but it wears off quick and now that theyre raising prices Im dumping it.

Tue, 07/26/2011 - 09:26 | 1494045 Boilermaker
Boilermaker's picture

What?  This is BS.

Here is the CNBC take on it: "Single-family home prices showed a slight improvement in May, the first time in nearly a year they haven't fallen on a monthly basis, a closely watched report said."

Tue, 07/26/2011 - 09:29 | 1494053 Cassandra Syndrome
Cassandra Syndrome's picture

QE3 predictions? By the end of September?

Tue, 07/26/2011 - 09:29 | 1494054 the not so migh...
the not so mighty maximiza's picture

They gotta create jobs then they gotta drop pricing 20% more to turn this around.

Tue, 07/26/2011 - 09:51 | 1494081 SheepDog-One
SheepDog-One's picture

'Create job's yea thats a sticking point when we're losing 400,000+ jobs a week, and our jobs have been sold overseas.

Cant drop pricing, thats 'bank assets'. We live in 2 separate worlds, Fantasyland and Realityland. Very few want to go to visit Realityland.

Tue, 07/26/2011 - 09:29 | 1494056 trillion_dollar...
trillion_dollar_deficit's picture

There are pockets where the the boom/bust are not nearly as pronounced.

For example, I bought a house last week at a mere 1.2% discount (12% in real terms) from when the seller purchased it in 2006. Plus I got the seller to pay for 100% of the closing costs. It had been on the market six months. But, I think I did very well.

Now, if you go by the overall CS Index, then you would think I did horribly.

Tue, 07/26/2011 - 09:54 | 1494109 SheepDog-One
SheepDog-One's picture

Really well you must have been one of the few in the country that sold a house. I know of no one around here who did.

Tue, 07/26/2011 - 09:30 | 1494057 Boilermaker
Boilermaker's picture

Time to push the REITS to new all time highs and triple digit valuations!

Tue, 07/26/2011 - 09:51 | 1494101 SheepDog-One
SheepDog-One's picture

Of course, thats the FED's 'assets'.

Tue, 07/26/2011 - 09:32 | 1494060 G-R-U-N-T
Tue, 07/26/2011 - 09:34 | 1494065 Norsky
Norsky's picture

The only real estate going up in value is good farmland.

Tue, 07/26/2011 - 09:34 | 1494067 tony bonn
tony bonn's picture

i think those annual figures should be expressed in terms of gold and certainly deflated with john williams' numbers

Tue, 07/26/2011 - 09:41 | 1494072 Dr. Engali
Dr. Engali's picture
"Spring buying boosted home prices for 2nd month"


This is how Yahoo news reports it. Then you read the story the second sentence starts off with "but"

Tue, 07/26/2011 - 09:49 | 1494097 SheepDog-One
SheepDog-One's picture

Ah yes, the 'spring buying season', lol.

Tue, 07/26/2011 - 09:38 | 1494076 SheepDog-One
SheepDog-One's picture

Certainly bullish for stocks, and proof we need to print more fake money and send more of our gutted industry overseas.

Tue, 07/26/2011 - 09:39 | 1494078 highwaytoserfdom
highwaytoserfdom's picture

Case Shiller does not include foreclosures.  The FED allowing the banks to put their paper on the GSE instead of liquidating caused the mess.. Housing is a joke..   Go to BLS and take average household income and multiply by 3 or 4..  That is average house price... The exception may be Washington DC area.. There the average household is 24% above the rest of the country..  (government spending).  The GSE, Realtors, and property tax collectors (again government mostly teachers) have pushed housing as an investment instead of a deprecting expense.  This best thing that could happen is prices get low enough where affordability index worked.  Unfortunately the FICO credit system rewards the least productive non risk takers over those who create jobs.   The politicians know the myth is a real problem because they have sold the future to those thinking housing is retirement and "largest investment".   We have lost a generation of talent which pervades banking, education , insurance,  real estate (commercial and residential) who understand little else. This is the systemic risk.  St Louis FED speaches by Poole spoke of this systemic risk..  Mr. Market rules and the Government is not happy about their economic irrelevances.   SYSTEMIC RISK...

Tue, 07/26/2011 - 09:45 | 1494089 SheepDog-One
SheepDog-One's picture

Housing is a total joke, I got a bunch of family and friends in the real estate world and theyre at a dead standstill, cant sell a tar paper shack to a hobo.

All this talk of a 'formula plan' for the USA's total bankruptcy is nothing but a sad joke, unfortunately a lot of people believe in it and hang on every word from their corrupt overlords.

Tue, 07/26/2011 - 12:00 | 1494717 Kayman
Kayman's picture



the FICO credit system rewards the least productive non risk takers over those who create jobs.

No truer words were ever written

The non-productive skimming and churning banking class loves the non-productive government obstructionist class.

Productive risk takers can go take a hike on FICO.

I have a business friend that has 1200 employees. I told him I was sick of the parasitical system and was winding things down.  Unfortunately he sold his soul to New York banksters and is glued to the treadmill.

Tue, 07/26/2011 - 09:51 | 1494102 newstreet
newstreet's picture

Washington D.C. the only region to show an increase.

Tue, 07/26/2011 - 09:54 | 1494111 cosmictrainwreck
cosmictrainwreck's picture

Yahoo! Finance headline "Spring buying boosts home prices for 2nd month" 

Tue, 07/26/2011 - 09:59 | 1494125 RobotTrader
RobotTrader's picture

As usual, I see no reaction in the retail stocks.

They continue to trade as if everything is rosy.

Meawhile, steel stocks are getting crushed, they are acting as if we are in the midst of a global depression.l

And crude oil just tanked by $3 in about 3 seconds.

Must be Obummer making another SPR announcement.

Tue, 07/26/2011 - 10:00 | 1494130 Miss Expectations
Miss Expectations's picture

The only beacon of hope was Washington D.C. with a +1.3% annual growth rate and a +2.4% monthly increase.

HaHaHaHaHa....this is NOT a welcome statistic.

Tue, 07/26/2011 - 10:47 | 1494333 glenlloyd
glenlloyd's picture

The whole idea that there will be a recovery in housing, there's too much weighing against it, besides the fact that they were and continue to be too expensive. When housing prices fall back in line with historic data I'll believe we've bottomed in housing.

I think people are re-evaluating home purchases as an option, either self imposed or just because credit standards are tighter and obtaining financing is a problem. And that doesn't even address the overhang in housing or the fear that prices will continue to fall.

I love it when the NAR gets on the tube and says that now is a great time to buy a house...hahahaha...sure it is!

Tue, 07/26/2011 - 10:53 | 1494361 snakehead
snakehead's picture

No job economy + tightened lending requirements = housing depression. Duh.  Election year approaching, time for Rebubble 2012.  Plan A: Fed becomes the direct mortgage lender, reinstates no income verification loans, pays the banks 10% to service the loans. Banks get all the re-fi and home equity loans which Bernanke personally cosigns to replace earned income. Banks boom. Soon all related housing industries start hiring and tax revenues increase.  Plan B: Start introducing the term "quadrillion".

Tue, 07/26/2011 - 11:08 | 1494433 Event Horizon
Event Horizon's picture

Average US house prices in Gold and Silver,, CHARTED WOW..



Tue, 07/26/2011 - 11:32 | 1494587 ElvisDog
ElvisDog's picture

Most non-surprising headline of the day from Bloomberg:

"New Home Sales Unexpectedly Fell for 2nd Straight Month"

Bad news is always "unexpected" by the pundits.

Tue, 07/26/2011 - 11:57 | 1494706 Obvious Paradox
Obvious Paradox's picture

All the comments that it is tough to get a loan now are BS on a historical scale.  When I started doing loans in 1984, a standard debt ratio with 20% down was 33/38 and maybe pushed to 36/41.  You can get loans today with 5% down with a dti ratio of 50%.  Sure, standards have gotten tougher since the FRAUD DOC days of 2003-2007, but now that we are back to doing full credit underwrites, credit conditions are still pretty easy in my opinion.  I watch prices in a few areas and have found that if a home is priced at the bottom of current comps, it sells.  Priced higher, it sits forever.  While I would like to hope prices are close to a bottom, in light of fewer foreclosure notices being filed.  I am uncertain of the economy going forward.  A few things are certain.  Keep your debt to a minimum, stay out of the US Stock Casino and guns and gold are likely your best investments for the next few years.

Tue, 07/26/2011 - 12:15 | 1494767 I Got Worms
I Got Worms's picture

Sold our Austin home in January. The young couple (newlyweds, late 20s) that bought it put down 3 fucking percent on a $275,000 home! FHA loan. I was just thinking of them the other day, and how they have probably already lost their equity in that house over the last 7 months. I am renting, and freaking love it. If the grass gets greener elsewhere, I'm pulling up stakes and hauling ass. No more anchor-mortgage.

Tue, 07/26/2011 - 12:45 | 1494901 TruthInSunshine
TruthInSunshine's picture

William Dudley has reminded those in his speaking engagements that sheetrock (aka drywall or gypsum board) is edible, and worthy replacement for baked goods and pastry.

Just make sure you don't eat Chinese sheetrock.

Tue, 08/23/2011 - 22:58 | 1593365 karmete
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