No Housing Bottom: Home Prices Decline For 7th Consecutive Month, Lowest Since 2003

Tyler Durden's picture

The November Case Shiller is out and while not surprising to most, some of those calling for a near-term housing bottom may be advised to reassess (for the 5th year in a row). According to the Top 20 City index composite, prices declined in 17 of 20 MSAs, with gains posted only in Phoenix, Denver and Minneapolis. At 137.52, the Seasonally Adjusted composite dropped to the lowest since February 2003, and is now a third lower than the housing peak in April 2006. Yet the worst news is that, even with a 2 month delay, the housing drop accelerated into the end of the year, and the sequential drop of 0.7% was the biggest decline since March 2011. Which means that except for that errant spike in home prices in April 2011, we have now seen 18 consecutive months of housing price declines since that "rebound" in late 2009. "Despite continued low interest rates and better real GDP growth in the fourth quarter, home prices continue to fall," David Blitzer, chairman of the index committee at Standard & Poor's, said in a statement. "The trend is down and there are few, if any, signs in the numbers that a turning point is close at hand." Yet just like in Europe, the improvement is coming. Aaaaany minute now.


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Dr. Engali's picture

But Cramer just recommended stocks for the ongoing housing recovery.

hedgeless_horseman's picture



Once again, picking bottoms is for monkeys.

Dr. Engali's picture

I thought that Cramer is a monkey.

kito's picture

cramer is one of those monkeys that have mutated as a result of an experiment gone awry........

Dr. Engali's picture

Cramer isn't bright enough to be Caeser. He must be one of the gorillas

goldfreak's picture

didn't a monkey beat Cramer in  a stock picking contest?

tekhneek's picture

Monkey(s) beat hedge fund managers, too.

It's true because Max Keiser said so.

Clueless Economist's picture

Cramer also recommended GM F and auto parts stocks, because people have lots of spending money because they are squatting in their houses and not paying the mortgage.

This is bullish for housing?

A big BOOOOYAH to you suckers!

mattu13048's picture

Thank you, Mr Change. This is clearly a change we can believe in.

oogs66's picture

why let data get in the way of a good story?

Shocker's picture

This is kinda surprising news... You mean housing is still going down. There is going to be no housing recovery until the Job market returns.

They kinda go, hand and hand

kito's picture

no matter how low the rates, you cant force demand in a deflationary environment. let housing be the canary in the coalmine to all things physical.........................................

fonzannoon's picture

How about all things equities? For example banks or homebuilders? There is a disconnect. Equities rising as the underlying assets dropping. Stagflation? Disinflation?

kito's picture

@fonzannoon---banks have equity??????????

fonzannoon's picture

I was referring to the bank stocks which should be choking on the underlying mortgages of these falling hard assets.

kito's picture

i guess you would be correct if the banks were actually truthful about the value of these falling "assets".......

fonzannoon's picture

yeah I know. It's true.

CPL's picture

That would require mark to market to be reinstated.

kito's picture

.....shhhhhhh, not so loud............

FreeNewEnergy's picture

The reality is that the banks unloaded a lot of their bad stuff back to Fannie and Freddie and the Fed has picked up most of the toxic MBS at par or close to it, which is why the whole economy is still stuck.

Of course, the banks couldn't unload all of it, so they're still on the hook for a significant amount.

Dick Bove likes the banks for that reason - among others - but, like a broken clock, he's only right twice a day.

toady's picture

another day, another dollar, ain't no need to fret ner holler.

Cdad's picture

Pffft.  Housing.  Who cares?  After all, that is Average Joe's largest investment.

What really matters is the paper wealth held by banks.

/sarc f'n off

praps's picture

Another 10 years of house price falls are already priced in.  No problem.

lizzy36's picture

No worries. Priced in.

The fact that for 80% of Yanks there house is their biggest investement is beside the point. Rumor has it China PMI may be above 50.....#BTFD

FreeNewEnergy's picture

Having your home as your largest asset is the norm, though it is not great thinking that got the US into such a position.

A house is a place to live, but plenty of people have tapped into it with home equity loans and HELOCs and they are now at risk of not only losing their largest "investment" but also their living quarters.

Home equity loans should never have been allowed to exceed 70% of equity, but they went way beyond that and now the squeeze is on.

Really, why, unless in dire need for cash, would anybody in their right mind mortgage out 100% of their living space? Do they intend to live in a box on the street when the Ponzi collapses?

The housing boom of the 2000s was well-conceived by the banksters and not well understood by the peons.

HE loans should be capped at 50% of equity. Then there would be less of a crisis whenever the market tanks.

It's good if you have cash, though, right now. Residential housing for purchase is getting pretty cheap and rents have been going up steadily.

Greed is good, if you know what the hell you're doing.

GeneMarchbanks's picture

'According to the Top 20 City index composite, prices declined in 17 of 20 MSAs, with gains posted only in Phoenix, Denver and Minneapolis.'

Denver maybe, but Phoenix?

hedgeless_horseman's picture



Maybe the developers are running a promotion where you get a free gallon of water with every home purchase in Denver or Phoenix?

Wet Winter Can't Slake West's Thirst

Pchelar's picture

"By the tiiiiime I get to Phoenix, she'll be riiiiisin'!"

See, Glen Campbell called it 25 years ago...

Osmium's picture

Actually quite a bit more that 25 years.  Campbell's version of By The Time I Get To Phoenix reached #2 on the US Country music charts in 1968.

toady's picture

the talking heads on the news just shocked about that... when you break down the numbers it turns out that it was speculators buy up the cheap foreclosures.

lolmao500's picture

Screw a recovery.

Homes prices need to go down to 1-2x the average salary. That means under $100k for a 2 bedrooms house.

dirtbagger's picture

Average income to MAXIMUM amount of home one can afford - historically has been about 30% (3x).  At the height of the mania, average prices were almost at 5x income.  Unless you are moving to the sticks, with few job prospects, expect a long wait for a 1x-2x ratio.

francis_sawyer's picture

Just sold a house...

Caveat: DC Area (the area is full of government jobs~qualified buyers)...

The thing is this... In addition to the challenges in home prices (I was lucky to get close to asking price)... if you're selling an existing home, you have to go thru a great deal of expense to bring it up to any kind of standard that would make it attractive to a potential buyer...

I was lucky to have many things in my favor... great location, school district, many upgrades to the house, etc... STILL...STILL... One must probably imagine having to put in about 10% more (of the homes value), in terms of detail work just to attract a buyer... Otherwise it'll just sit there and get passed over...

So what I'm saying is that one should START with the numbers in this article, and expect to go out of pocket about 10% (at least) more if they want to know what their house is worth...

francis_sawyer's picture

PS... It sat on the market for about 2 months (albeit NOT prime home selling months ~ between Halloween & New Years)...

It took about 40 "looks" (visits), to finally hook a buyer who both liked the house & had all the credentials to buy)...

lolmao500's picture

Yeah my father tried to sell his house, took 2 years while he worked to improve it day in day out.

Village Smithy's picture

Thanks for the "Real World" take on this. So what you're saying is that as bad as these numbers are, it's actually worse because the homes that are being sold are being "subsidized" by the seller relative to what they may have been historically.

francis_sawyer's picture

That's precisely what I'm saying...

If you happen to be handy, you can do a lot of work yourself, but you still can't get around certain expenses because they have to PASS INSPECTION (& therefore REQUIRE licensed contractors to do the work)... I'll give you examples:


-fire alarm systems

-radon detection (FUCKING RADON!)

-plumbing (including 'rooting' of outside pipes &/or septic work if necessary)

-all electrical


That's just the 'starter kit'... I'm telling you, the 10% number is probably realistic... IOW... If you're trying to sell a house in the $400,000 range, expect to go out of pocket $40,000 simply to bring it up to speed (for comparable NEW homes in the same area)... It probably scales evenly up & down from there, but that's just a hunch...

Lndmvr's picture

Gatting ready to sell as we speak. Going to try and take an RV as down payment. I am not too sure about repairs tho. I saw a house here with the roofing tarped sell last week. After 10 houses bought and sold, I still think it's price and not looks. Time will tell. Here in Iowa the banks just go online and look at the assessed value for information. Bought this one with no inspections by anyone, just accespted "as-is".

francis_sawyer's picture

I'm sure there are areas where regulations are more lax...

But this is DC/Md... (it's a pretty 'stuffy' area in terms of regulations)...

I can't even begin to imagine what the situation in a place like Vegas is (where there may be entire areas borded up)...

prole's picture

Thanks for the on-the-ground report, but I think your 10% spruce-up costs are greatly misoverestimated. Putting that much in the spruce-up probably helps with the curb-appeal to sell it, but just my opinion here, most DC/Metro area homes are selling without that much, not near that much. Most homes around DC are pretty good shape in the first place. Feds have a lot of free time and high salary to spend keeping their personal bunkers nice.

francis_sawyer's picture

curb side appeal (to sell it)... is a big part of the equation (in terms of how close you end up to the 10% calculation)...

I just saw the writing on the wall and decided I'd do everything I could to make it sell FAST (which it did, mostly)... I didn't want to dick around anymore in an economy that it being held together with bailing wire... The sheep are still fairly ignorant (or SECURE, they think, if they're government workers)...

But the process of giving it more and more and more curbside appeal (based on the feedback I was getting on views) was a trip... My personal joke was that pretty soon I was going to have to put in granite countertops IN THE GARAGE... Then... no shit... One of the contractors that was doing some of the work told me that in another house he was working on they requested exactly that...


serog's picture

Multiple offers are becoming more common place in the minneapolis market.  Rather than putting 10% in to the homes to sell, sellers are just pricing realistically from the get-go. 

Slim's picture

Francis, thanks for taking the time to post an 'on-the-ground' experience from what has been the nation's strongest and most resilient housing market (for what it's worth I can't stand seeing Washington area do best when they played a huge part in causing this mess).

For what it's worth, I think you made a good move in getting out of there.  The government employment bubble at some point has to go and that area kept ripping and held when no others did.  An extra infusion of hot air does not mean it isn't a bubble too, and this one will definitely come down one way or another.

I think your experience is similar to most in that when the initial pop comes, it isn't seen in that rather than solid houses selling for above market (with crap selling at market), solid houses with upgrades begin to sell for market and others don't move at all.  It doesn't show up in the stats, but that's a significant hit to a market.

Appreciate the time.

rodocostarica's picture

Hey MDB what do you think Obama and government should be doing to correct this housing problem?


I'm sure you have an opinion.

Dr. Engali's picture

They shouldn't be doing anything. Let the market naturaly correct. Prices will fall to a point where investors (not speculators)and  first time home buyers can get in.