No Housing Recovery - Case Shiller Shows 8th Consecutive Month Of House Price Declines

Tyler Durden's picture

Little that can be added here. The December Case Shiller came, saw, and shut up all those who keep calling for a home price recovery. The Index printed at 136.71 on expectations of 137.11, with the prior revised to 138.24. The top 20 City composite was down -0.5% on expectations of a 0.35% drop. 18 out of 20 MSAs saw monthly declines in December over November, with just the worst of the worst - Miami and Phoenix - posting a dead cat bounce, rising 0.2% and 0.8% respectively. And granted the data is delayed, but the fact that we have now had 8 consecutive months of home price declines even with mortgage rates persistently at record lows, and the double dip in housing more than obvious, can we finally shut up about a housing bottom? Because as Case Shiller's David Blitzer says: "If anything it looks like we might have reentered a period of decline as we begin 2012.” QED

From the report:

“In terms of prices, the housing market ended 2011 on a very disappointing note,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “With this month’s report we saw all three composite hit new record lows. While we thought we saw some signs of stabilization in the middle of 2011, it appears that neither the economy nor consumer confidence was strong enough to move the market in a positive direction as the year ended.

 

“After a prior three years of accelerated decline, the past two years has been a story of a housing market that is bottoming out but has not yet stabilized. Up until today’s report we had believed the crisis lows for the composites were behind us, with the 10-City Composite originally hitting a low in April 2009 and the 20-City Composite in March 2011. Now it looks like neither was the case, as both hit new record lows in December 2011. The National Composite fell by 3.8% in the fourth quarter alone, and is down 33.8% from its 2nd quarter 2006 peak. It also recorded a new record low.

 

“In general, most of the regions also posted weak data in December. Eighteen of the cities saw average home prices fall in December over November. Seventeen of the cities have seen monthly declines for at least three consecutive months. In addition to both monthly composites, 10 of the cities saw home prices fall by more than 1.0% during the month of December. The pick-up in the economy has simply not been strong enough to keep home prices stabilized. If anything it looks like we might have reentered a period of decline as we begin 2012.”

8 Consecutive Months of Declines:

Long-Term Case-Shiller:

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Caviar Emptor's picture

ooofahhh.....gut punch. 

markmotive's picture

It's a slow painful death. Still, housing is much cheaper than it was a few years ago.

Mike Maloney on the gold-real estate cycle:

http://www.planbeconomics.com/2011/03/22/gold-vs-real-estate-know-the-cycle/

TruthInSunshine's picture

Expectations of a 0.35% drop were revised down (after the actual release) to expectations of a 0.7% drop, thus making the 0.5% drop an extraordinary upside surprise.

Caviar Emptor's picture

Prices are down 33.8% from their peak in the second quarter of 2006

You're right. That was an upside surprise! Consumers are WAY richer than they thought. 



EscapeKey's picture

In actuality, it's more like "less poor", but why not go with the corporate media spin.

donsluck's picture

Since you need shelter of some kind, I have always argued that rising housing prices equal impoverishment. After all, isn't rising food prices a sign of reduced purchasing power, ie impoverishment?

Mugatu's picture

Question: Why do the banksters get 1% money to buy shitty government bonds that have no collateral backing them, yet the people don't get 1% free money to buy real estate that actually has tangible value.  

Answer: We live in a world where the nebulous and intangible has more value than those assets with real value.

Fukushima Sam's picture

And an investor looks for just such opportunities, where something is temporarily undervalued.  Play your hand accordingly.

I should be working's picture

Cheaper than a few years ago is irrelavent.  Tech stocks were very cheap in 2003 relative to 2000, but they still lagged the market for several years.  Cheap relative to a bubble is still expensive historically.

When people stop calling for a bottom in the housing market every few months maybe it will finally bottom.  If we're lucky by 2015.  Even then, housing is a lousy investment.  There is plenty of land in the US and most in places it doesn't make any sense for a house to cost that much more than the price to build it.

markmotive's picture

The point is that someone buying a house for the first time today (because everyone either needs to rent or buy...or live in their mom's basement) can get a much better deal than someone buying a few years ago.

Regardless, I would define 'value' in relation to incomes and rents. Not by how much the price has moved.

midtowng's picture

So in other words, since the housing market started imploding in 2005, the only bounce we've seen (2009-2010) was when the federal government threw billions of free dollars at it.

TuesdayBen's picture

Free dollars!  Free!  Free!

Free at last.  Free at last.

EscapeKey's picture

A perfect example of a Keynesian recovery.

TruthInSunshine's picture

This recovery is looking more & more lower case q-ish...

Gully Foyle's picture

Funny on the housing thing. I've looked at a few homes recently. They left the market lower than when they returned. What fucking realtor is advising " Now is the best time to raise the asking price of your house that sat on the market for two years already"?

Woodyg's picture

I was looking at 2 possible properties in the portlnd area - both trailers on 5 acres - looking at low-balling the overpriced property that have sat vacant for at least a year on the market -

When 2 weeks ago both went up in price 35%

More proof the supply -demand curve is a quaint old fashioned relic no longer in effect.

Or maybe proof the banks can't actually sell the foreclosures as they are worth more as an asset on the books than an actual loss.

And if they do sell a bunch of the foreclosures they will be shown to be Bankrupt.

donsluck's picture

Oops, we bought in August, cash. Short sale offered at 380K. We offered 385K. 2nd Note holder stopped the sale over their 5K demand. Forclosed. Bought it after forclosure for 350K, saved 30K. The price signal is a point where the bank is in trouble enough to get federal aid, but not so much to be closed and sold to a bigger bank.

CoolBeans's picture

Interesting observation -- which may explain what I'm seeing around here.

The local realtors post their "daisies and sunshine" sales/under contract reports each week.  Well, you'd think the market was just humming along.  But, if one compares the "under contract" list with those that actually make it to the final sale -- they don't come close to matching up.  Then, weeks and weeks - sometimes months later - these homes show up on the report again -- getting put under contract.  Few make the "sales" report.

So, it would seem the short sales and foreclosure sales have a pretty low success rate.  I'm inclined to think that the ones that do make it to the final sale are the all-cash offers.  But, again - very few as a whole.

transaccountin's picture

Bullish Hopioum!

Besides, as CNBS explained it, its because of Winter!

Conman's picture

You mean the abnormally warm winter where it barely snowed in most of the heavily populated areas of america? YA! thats it, winter brrrr. no house buying, never mind its already seasonaly adjusted data blame it on the weather!

Caviar Emptor's picture

Well, to be fair, it was UNexpectedly mild.....so that dragged down housing because of sweaty sales reps who turn customers off.

And it was a definite downer for gnomes or people seeking frigidity and ice when they buy real estate

Gully Foyle's picture

Caviar Emptor

"so that dragged down housing because of sweaty sales reps who turn customers off."

You do understand that Female Real Estate agents are one of the demographics most likely to cheat on a spouse. Lot's of sweaty in those showings.

Caviar Emptor's picture

You're right. Forgot to factor that in. 

By the way, if a sales rep is sweaty, does that mean that she likes me? 

Gully Foyle's picture

Caviar Emptor

Either that or the drugs are wearing off/kicking in.

Farley's picture

Nah,...that means she liked the previous guy. :-)

Deep79's picture

But Cramer told me Housing bottommed in 2009?

 

 

Cdad's picture

You should only expect Cramer's call for that housing bottom to be shouted louder now...to overcome the effect of the actual index of home values.

Gomie's picture

And yesterday. He was among dozens paraded on MSM to tell us all housing had clearly bottomed. Well they'll do it all over again next month.

Taterboy's picture

Yesterday afternoon a visiting CNBC genius said "housing has bottomed". My cats looked on astonished as their dad said dirty words and then had to wipe the spit off the TV. They instantly shared their catnip with me to calm me down. They then called the cable company to put a block on CNBC. My kittys love me!

WestVillageIdiot's picture

You sick bastard.  You should be arrested for animal cruelty.  Forcing your cats to listen to Cramer is akin to pulling a Clark Griswold and leaving the dog tied to the bumper.  =)

Woodyg's picture

I think that's a Romney now - where you tie the dog to the top of the car for the 70 mph 500 mile trip - and then wnder why the dog shit himself leaving brown stains running down the back window.

Caviar Emptor's picture

No, silly! Cramer said he was housing bottoms in 2009. You know, bootayy

roadhazard's picture

Remember when he had that "number of days until the housing recovery" on the wall in 09' and he took it down two weeks early and declared victory. I laffed and laffed. What a maroon that clown is. BOO YAH, you moron.

Conman's picture

Quick someone give Case and Shiller a shot of Hopium and enroll them in the BLS school of statistic fudging.

Caviar Emptor's picture

Let's review: 

 

-What you're spending? ....UP

-What you're worth?.....DOWN.

 

That was easy!

cossack55's picture

So, when is the quiz?  I'm aceing this baby.

Caviar Emptor's picture

You are sharp this mornin', coss!

donsluck's picture

Since when does the "value" of your real estate matter to what you're worth? The value of your real estate is what you get after you sell it. There is no value until the sale of anything. And, as they say, you can buy more real estate in a day than you can sell in a lifetime.

Cdad's picture

The economic effect of a collapsing Case Shiller index is priced in.  Due to fascism brought to you by your local criminal syndicate Wall Street banking cartel, the people's net worth no longer matters.  We are all saved....although my condolences are hereby extended to all of you home owners out there. 

disabledvet's picture

Actually this what kills wall street fascism. this isn't a problem for those who don't use margin and don't speculate wildly in the futures and options markets. In short "you think Apple cares with 100 billion in cash?" obviously not--tho this is not a valuation call on that equity. No..if this problem persists it's a problem for state and local tax collection as their revenues dry up and they are forced to turn to Wall Street to pay for day to day expenses via massive borrowing. And YES...that is BULLISH for "Bailout NATION(S)"

prains's picture

can't wait until the contaminated chinese gypsum in the drywall really starts to smell, ouch

Chimerican's picture

The dude with the funky beard from S&P is on CNBC saying there are positive indicators. Prof Shiller says lots of good news biy next year, "kind of the same...it wouldn't be an obvious mistake to buy a house now." I'd rather buy a pig in a poke.

Snidley Whipsnae's picture

By next year there might be some good news for residential... none for commercial.

DeltaCharlie's picture

Buffett is made to look like a baffoon! Go on, have another cherry coke. 

kito's picture

negative treasury rates at the plate, negative mortgage rates on deck............

LawsofPhysics's picture

Sweet,

I can get paid to buy more property?  That should help kick inflation into high gear.  what's up you say?  The rent, bitchez.

donsluck's picture

Rent is up, but only to match inflation, the buy price trend is generally down, but has slowed. Too early to call a bottom, I would wait 6 months after Greece implodes and revisit the issue.

Roni's picture

but it is bottoming it means it will keep hitting new bootoms --------bulllllllsshhhh