new case shiller housing index data

[brian_in_la]

The newest data from the case-shiller index is out (three month sample of sales including september). Short story for SoCal…San Diego down -.3% from august, -1.0% YOY. LA, +.1% from august, +7.1% YOY. 10 city composite -.3% from august, +3.7% YOY. There’s also a video clip of shiller up at bloomberg. He mentions that the traded index futures are “predicting” a 5% or so decline YOY for next august. Anyway, FWIW. Have enjoyed all your comments and Rich’s posts for a long time now….though I sort of miss snarky old Dr. Piggington.

[SD Renter]

The Case-Schiller price declines are extremely modest compared to the actual market, in my opinion. I wonder if the Case-Schiller algorithim excludes same-home sales that are in a state of foreclosure, surmising that these homes are in a significant state of disrepair making them unrepresentative of the market. If that is the case, Mr genius Schiller needs to re-program his computer. I hope those who invest in the Case-Schiller futures are intimately familiar with the algorithim as it may not be exactly perfect just yet.

[(former)FormerSanDiegan]

So, we couldn’t trust the Median reports because they are not representative of the market and now we can’t trust the Case-Shiller index ?

I disagree. I think both are decent indicators of the market. They just lag what you are seeing on the streets. The 4th quarter numbers from Case-Shiller will likely contain the data supporting your assessment of today’s market.

[brian_in_la]

I’ll check in to the foreclosure issue, but I think that these are included. There are several factors that might hide declines. First, there is not capture of rebates, covering of closing costs, ect. as far as I can tell. Home builders are clearly using these and there is certainly some action in the resale market as well. Second, resales that occur in less than six months are not used. The reasoning is that such transactions may represent something other than arms lengths transactions (e.g. a parent buys a house and then “sells” it to his/her kid a short time later). I was not totally happy to see this because I think it downplays the speculative aspect of the market. However, it may well be that by not including these six month or less sales that the CS index actually failed to fully capture the extent of the boom in the run-up to the summer softening. All of the crazy “buy in march, sell in april” sorts of sales were not included in the weighted index. The third thing to remember is that it is a rolling index of the last three months of sales…as FSD states above, the fourth quarter awaits.

If I could put in my own two cents…I do sometimes think that folks on this board and other bubbleblogs have a mirror image mentality with regard to the boom. Many expect the bust to be sharp, fast, and exciting. I admit I find myself harboring the same hopes. However, this is a form of speculative thinking. Housing busts generally seems to be slow, boring, long affairs in which much of the downturn occurs from inflation eating away value. As an LA professional earning nearly 100k and not able to afford to buy, I too wish for a fast 40% correction. I just don’t think its going to happen that way. (ps. addendum to my first post, I should say “data” are plural…since I work with data every day, its an embarassing mistake!)

[scott]

April 2007 Case-Schiller Data out today:
SD:
-6.70% YoY
-0.27% one month
-7.07% since November 2006 peak
S & P commentary (pdf)

[scott]

April 2007 Case-Schiller Data out today:
SD:
-6.70% YoY
-0.27% one month
-7.07% since November 2006 peak
S & P commentary (pdf)

[Duck]

Those last numbers (down about 7% YOY) seems about right.

If you look at the historical prices for San Diego (using the Case/Schiller index), you can make a case that the bottom will be in 2009 or perhaps not until 2012 using a “normal appreciation” of 6% from when the market was fairly valued. The problem is determining at what point the index was fairly priced. Was it 1995? 1998? 2002? I know the market doesn’t go up or down gradually, but if we get 2 more years of 7% declines, the market would be what I consider fairly valued for a 10 year period.

BTW, I thought San Diego was cheap in 2000 and overpriced by 2004 without benefit of any statistics.

[Duck]

Those last numbers (down about 7% YOY) seems about right.

If you look at the historical prices for San Diego (using the Case/Schiller index), you can make a case that the bottom will be in 2009 or perhaps not until 2012 using a “normal appreciation” of 6% from when the market was fairly valued. The problem is determining at what point the index was fairly priced. Was it 1995? 1998? 2002? I know the market doesn’t go up or down gradually, but if we get 2 more years of 7% declines, the market would be what I consider fairly valued for a 10 year period.

BTW, I thought San Diego was cheap in 2000 and overpriced by 2004 without benefit of any statistics.

[what_a_disasta]

If you add 6% a year to homes that were bought in 1998 @ 300k they wouldn’t have reached today’s 700k levels till 2013. If prices drop 20% between now and 2009 then they will be just about in balance. That seems like quite a likely scenario.

(adding 6% a year)
$300,000.00 1998
$318,000.00 1999
$337,080.00 2000
$357,304.80 2001
$378,743.09 2002
$401,467.67 2003
$425,555.73 2004
$451,089.08 2005
$478,154.42 2006
$506,843.69 2007
$537,254.31 2008
$569,489.57 2009
$603,658.94 2010
$639,878.48 2011
$678,271.19 2012
$718,967.46 2013

[what_a_disasta]

If you add 6% a year to homes that were bought in 1998 @ 300k they wouldn’t have reached today’s 700k levels till 2013. If prices drop 20% between now and 2009 then they will be just about in balance. That seems like quite a likely scenario.

(adding 6% a year)
$300,000.00 1998
$318,000.00 1999
$337,080.00 2000
$357,304.80 2001
$378,743.09 2002
$401,467.67 2003
$425,555.73 2004
$451,089.08 2005
$478,154.42 2006
$506,843.69 2007
$537,254.31 2008
$569,489.57 2009
$603,658.94 2010
$639,878.48 2011
$678,271.19 2012
$718,967.46 2013

[scott]

May 2007 Case-Shiller Data out today:
SD:
-6.96% YoY
-0.36% one month
-7.41% since November 2005 peak

[scott]

May 2007 Case-Shiller Data out today:
SD:
-6.96% YoY
-0.36% one month
-7.41% since November 2005 peak

[scott]

July 2007 Case-Shiller Data out today:
SD:
-7.78% YoY
-0.73% one month
-8.26% since November 2005 peak

[WaitingToExhale]

The original post from November 2006 is interesting with the statement:

There’s also a video clip of shiller up at bloomberg. He mentions that the traded index futures are “predicting” a 5% or so decline YOY for next august.

The prediction wasn’t right in principle, if somewhat conservative (~5% predicted YOY decline for August and we are at a 7.8% decline as of the July data).

Where can one see the traded index futures? I would imagine they are pretty confused at this point with the whole credit crunch and the threat of government intervention.

[brian_in_la]

Hi – you can check out the indices at the Chicago Merc. I think you have to register with their site, but I think you can get charts of price data without having to pay any money. Someone more savvy than me probably knows other routes (Bloomberg?) as well.

[Author]

Posts