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Case Shiller and CAR Analysis

Housing prices — overview of declines in various cities.  These numbers do not include the latest, which would reflect worsening of conditions in October and November. 

Case Shiller and CAR Analysis November 2008 Release 

Courtesy of Mish

California Association of Realtors C.A.R. Data

The following chart is from my friend "TC" who has been monitoring California Association of Realtors (C.A.R.) and DQNews data. C.A.R. data contains resale single family residences and new homes. DQNews data contains resale single family residences and new homes.  (Click on charts for sharper images.)

Median nominal prices in CA are now down 47% according to CAR and 42% according to DQNews – and those declines are in less than 18 months!

Case-Shiller is a more accurate way of looking at home prices than median prices. Case-Shiller data follows.

Case Shiller November Release

Inquiring minds are considering the Case Shiller Home Price Release for November 2008.

New York, October 28, 2008 – Data through August 2008, released today by Standard & Poor’s for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, shows continued broad based declines in the prices of existing single family homes across the United States, a trend that prevailed throughout the first half of 2008 and has continued into the second half.

The chart below depicts the annual returns of the U.S. National, the 10-City Composite and the 20-City Composite Home Price Indices. The decline in the S&P/Case-Shiller U.S. National Home Price Index – which covers all nine U.S. census divisions – remained in double digits, posting a record 16.6% decline in the third quarter of 2008 versus the third quarter of 2007. This has increased from the annual declines of 15.1% and 14.0%, reported for the 2nd and 1st quarters of the year, respectively. The 10-City and 20-City Composites continue to set new records, with annual declines of 18.6% and 17.4%, respectively.

click on chart for sharper image

Case-Shiller Declines Since Peak

The following charts were produced by my friend "TC" who has been monitoring Case-Shiller Data. Although individual cities topped at varying times, the top-10 and top-20 city composites peaked in a June-July 2006 timeframe.

Case-Shiller Declines Since Peak Current Data

click on chart for sharper image

Case-Shiller Declines Since Peak Futures Data

click on chart for sharper image

"TC" writes:

The housing numbers are as grim as expected. The CAR housing numbers reflect Oct 2008 which are actual sales in late August and September (read pre-market meltdown). The price declines range from 30% to 60% with median price declines between $130,000 and $800,000.

It now appears that the high end market price declines are picking up steam and will likely mirror the price declines of the bottom and middle end markets. More and more of my friends and friends of friends (many of whom did NOT leverage themselves like typical Californians) are talking about walking away from their homes. The fact that upper middle class Californians some of who put 5%, 10% or even 20% down would even consider walking away tells you the scope of the problem.

The Case-Shiller numbers are for September 2008 which do not reflect any of the market meltdown. Price declines in excess of 10% are now occurring nearly everywhere, although the median dollar declines are only above $100,000 in those markets that experienced extreme price appreciation (CA, AZ, NV, FL). The trading in the futures markets continues to reflect nominal price declines for the next 2-3 years with prices plateauing afterwards (they only price out 60 months forward).

Thanks "TC"

With unemployment poised to rise in 2009 it is extremely unlikely that housing bottoms anytime soon.

Mike "Mish" Shedlock

 


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