Case Shiller Index Has First Monthly Increase Since 2006

In another sign of economic stabilization, the Case Shiller 20-City Home price index rose 0.5% from April to May. This was the first monthly rise since July 2006, and it provides further ammo for economic bulls who are anticipating an economic rebound. Skeptics, on the other hand, will write off this rise as a seasonal blip and focus on the 17.1% year/year decline. While seasonal factors may be at play, an increase is an increase, and after 34 months without one, we'll take it.

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Comments

[wshed:]

Houston,

These aren't the seasonally adjusted numbers which came out later and show a decline. Someone writng headlines thinks you are a sucker. Put your hand on your wallet and back out of the room.

--Bob

Jul 28 12:14 PM

[Upordown:]

The sales during the end of 2008 and especially the 1st Q of 2009 were driven by a high number of foreclosures tied to subprime mortgages. These subprime mortgages represented lower priced homes. As we have moved through the inventory of these foreclosures, the median and average price of home sales have to go up. This does not mean that the market has stabilized. We are now starting the process of seeing increased foreclosures of Alt A and even prime mortgages. These homes represent higher priced homes and so will throw off the price statistics. This does not mean that we have hit the bottom of the real estate cycle, we have only hit the bottom of subprime real estate.

Jul 28 12:33 PM

[debtacid:]

A sign of stabilization or just inflation? I feel sorry for all those young couples out there looking for reasonably priced homes to raise their families. They are going to get bled dry by wall street vampires. Real estate is for suckers.

Jul 28 12:36 PM

[wshed:]

Upordown:

What you say is true, but I think it doesn't apply to Case-Shiller which is based on repeat sales of the same houses.

debtacid:
I think real estate, when it finally gets close to the bottom, will be a good place to escape the vampires of finance. It will also be a nice inflation hedge, and paying off fixed rate mortgages with inflated dollars should be fun.

--bob

Jul 28 12:45 PM

[chileponese:]

one word - SUMMER. we all know the summer months(may, june, july) are all BIG months for real estate transactions. i'll be a monkey's uncle if home prices are still rising by oct/nov. i can't wait till january comes around!

Jul 28 12:53 PM

[HunterGVL:]

The Home Price Index is not going straight down! Yeeeeaaahhhhhh!

We're saved! It's finally over and the housing boom will once again commence. That little squiggle will overcome Option ARMs and Alt-A crisest that are already starting but will really come home to roost next spring. But hell with the facts, I can 'SEE' a little squiggly line that looks like it wants to go up.

It's like the little train that could and anyone who wants to bring the monstrous crush of looming mortgage failures into this article is just a meany. After another $10 Trillion in Mortgage failures, 3,000 banks failing, and unemployment reaching 25% (the real number), we should rejoice that in a single month of housing stats, there is a single uptick.

Hope is not a sound investment philosophy. Stowe the unwarranted optimism, invest for a depression followed by inflationary times, and get a gun.

Jul 28 01:29 PM

[Robert H. H...:]

www2.standardandpoors....


On Jul 28 10:21 AM User 459512 wrote:

> I'm just wondering if the uptick is statistically significant. Does
> anyone know where I can get raw data for the Case Shiller Index?

Jul 28 02:02 PM

[Fighting Yoda:]

Case-Shiller index seasonally adjusted(SA) data was released with slight delay today - it indicates falls for both 10 and 20 city index. Non seasanally adjusted (NSA) had slight uptick but SA had a downtick -0.21% and -0.16% for 10 and 20 city index respectively.

SA housing prices is the only way to look at home prices as they are very dependent on the season - summer is the home buying season - upticks happen.

But the major/troubled markets continue steep declines - Phoenix: -1.73%, Miami: -1.12%, Vegas: -3.08%.

Jul 28 02:07 PM

[anti sucker:]

watch out !!!!! this are the same people who are responsible for trillions of dollars wealth distruction. Plain and simple, theses are lies. And by the way this is summer what you expect ?.

Jul 28 02:25 PM

[debtacid:]

"and paying off fixed rate mortgages with inflated dollars should be fun."

Don't forget the huge finance charges you pay in the beginning with dollars that are much more valuable than at the end of the loan. You end up paying down your principal with inflated dollars while the bank took the gravy during the first 20 years. And don't forget taxes, upkeep, real estate fees... It's a fools game.

Jul 28 02:27 PM

[mbr:]

The chart is misleading. How can a mere 0.5% one month increase in an index with steps of 20 on the Y axis and steps of one year on the X axis show such an upturn in the curve?

Jul 28 02:38 PM

[Swashbuckler:]

The increase is hardly the stuff of wet dreams for economic bulls. I mean, you almost need a magnifying glass to see the uptick on the graph. You want to hang your hat on that, be my guest. I'll pass.

Jul 28 02:42 PM

[noblepaladin:]

Prime mortgages are defaulting because a lot of people are unemployed and cannot pay their mortgage. The sub-prime crisis has mostly passed, but sub-prime people own crappy houses. Depending on where you live, you might find that most of the houses on the market are very old dumps. When the higher quality homes are put on the market, the median price goes up. This is going to be one hell of a head fake that will catch a lot of people off guard.

The past few quarters, the market was saturated with crappy sub-prime houses selling at low prices. Now that prime real estate is defaulting, these high quality homes bring up the median price, but the prices of low quality homes as a class is going down and the prices of high quality homes as a class is also going down. The ratio of low quality homes to high quality homes for sale has went down.

Jul 28 03:11 PM

[enigmaman:]

Thats great news, first price increase in 34 months, good news for sure but what does it actually mean, where are the subject houses that are tracked located? How is the price increase calculated, based on just the subject house or the area. Are the subject houses representative of the general market? Was the subject homes price increases indicative for the area or an anomaly? I mean you can go on and on with the questions. We have all learned that facts and figures, prices are all subject to interpretation.

We have new homes being build even though we have a glut of homes and celebrate a reported increase in new home sales thought at big discounts. Builders need to build to stay in business and not go fishing so adding more home to the glut is good news I guess. Banks are keeping foreclosures at bay nit because owners are paying but because banks dont need anymore write offs to soil there recent reported earnings, but they are there waiting to flood the market, I guess that will be good news for home prices.

I guess the report is good news until its not so lets celebrate while we can because tomorrow brings another day of reports.

Jul 28 03:21 PM

[Rohan C. Pease:]

Hunter GVL,

I don't think your accurate about another $10T of mortgage failures, the entire residential mortgage market in the US beofe the crisis was $14T and commerical real estate which everyone is so worried about casts a shadow of $2T.

Source: Goldman Sachs

Jul 28 03:24 PM

[Schweizer:]

Bespoke is a joke.

All that has happened is that a larger number of more expensive homes are being foreclosed upon now and as these sell the average price goes up!!

This is not a good sign and it does not indicate a bottom!!!!

Jul 28 03:34 PM

[Houston:]

Schweizer

That's not how case schiller works. Its not the same as a median price increase that the NAR would put out.

Bob

For 34 months (3 years) prices have tanked, seasonally adjusted or not. This is the first up tick...aided by the season, but the first uptick nonetheless...and places like Phoenix don't have the same seasonal fluctuations because of snowbirds and summer heat.

Whether this uptick was caused by an ugly red headed stepchild, Merlin the Magician, or Jumping Jack Flash, it stands as the first levelling off of a reasonably reliable index that has raced downhill for three years.

Jul 28 04:36 PM

[Robespierre:]

So they went up NSA by %0.5 and you are optimistic. So here is what I think: They went up ONLY %0.5 after not being SA, after $8000 (Fed) and $10,000 (CA). Take that all away (and you will eventually) and the buyers are buying way too soon and paying way too much


On Jul 28 04:36 PM Houston wrote:

> Schweizer
>
> That's not how case schiller works. Its not the same as a median
> price increase that the NAR would put out.
>
> Bob
>
> For 34 months (3 years) prices have tanked, seasonally adjusted or
> not. This is the first up tick...aided by the season, but the first
> uptick nonetheless...and places like Phoenix don't have the same
> seasonal fluctuations because of snowbirds and summer heat.
>
> Whether this uptick was caused by an ugly red headed stepchild, Merlin
> the Magician, or Jumping Jack Flash, it stands as the first levelling
> off of a reasonably reliable index that has raced downhill for three
> years.

Jul 28 05:19 PM

[wshed:]

Houston,
I look at the size of this "leveling off", the various factors that contributed to it, and the large number of negatives waiting in the wings ready to drop in the next few quarters.and I think it's a mirage. You see signs that a bottom has been reached. Maybe you should buy some houses. A lot of people in the industry hope you do. I don't think I will just yet. Good luck.

Bob


On Jul 28 04:36 PM Houston wrote:
> Bob
>
> For 34 months (3 years) prices have tanked, seasonally adjusted or
> not. This is the first up tick...aided by the season, but the first
> uptick nonetheless...and places like Phoenix don't have the same
> seasonal fluctuations because of snowbirds and summer heat.
>
> Whether this uptick was caused by an ugly red headed stepchild, Merlin
> the Magician, or Jumping Jack Flash, it stands as the first levelling
> off of a reasonably reliable index that has raced downhill for three
> years.

Jul 29 12:23 PM

[richjoy403:]

Nothing lasts forever, you know it, and you still don't believe it.

So housing tanked. It's either over, or about to be over. In any case, I'm an investor (not a day trader) and I'm investing again.

Reduce your exposure when the economy is entering a cyclical downturn (this is the 6th recession since I graduated high school in 1960), and start buying back in 3 to 6 months before the stats have confirmed the bull market is back on.

Stop obsessing about the details, or you will never be able to make a decision.

Jul 30 08:45 AM