Will They or Won’t They?
Courtesy of Michael Panzner of Financial Armageddon
I reckon that even die-hard bulls will concede that it’s hard to imagine we’ll see a sustained recovery in the U.S. economy without a rebound — or even a measure of stability — in the housing market. After all, it was trouble in the residential real estate market that helped bring us to this point to begin with.
Under the circumstances, the following announcement from real estate analyst firm Clear Capital should lead at least some of those who only see good times on the horizon to reconsider — right?
Special Release: Clear Capital™ Reports Sudden and Dramatic Drop in U.S. Home Prices
Most recent data shows a two-month 5.9% price decline representing a magnitude and speed of decline not seen since March 2009; similar declines for September and October expected to appear in other industry indices in coming months.
TRUCKEE, Calif. – Oct. 22, 2010 – Clear Capital (www.clearcapital.com), is issuing this special alert on a dramatic change observed in U.S. home prices.
“Clear Capital’s latest data shows even more pronounced price declines than our most recent HDI market report released two weeks ago,” said Dr. Alex Villacorta, senior statistician, Clear Capital. “At the national level, home prices are clearly experiencing a dramatic drop from the tax credit-induced highs, effectively wiping out all of the gains obtained during the flurry of activity just preceding the tax credit expiration.”
This special Clear Capital Home Data Index (HDI) alert shows that national home prices have declined 5.9% in just two months and are now at the same level as in mid April 2010, two weeks prior to the expiration of the recent federal homebuyer tax credit. This significant drop in prices, in advance of the typical winter housing market slowdowns, paints an ominous picture that will likely show up in other home data indices in the coming months.
Clear Capital HDI Index and S&P/Case-Shiller 20-City Composite HPI
For example, both Clear Capital and S&P/Case-Shiller indices have displayed consistent market peak, trough, secondary trough, and tax credit run-ups. Despite these consistencies, a critical difference is that HDI’s patent pending methodology enables more timely and granular reporting. Therefore, if previous correlations between the Clear Capital and S&P/Case-Shiller indices continue as expected, the next two months will show a similar downward trend in S&P/Case Shiller numbers.
