Housing Futures Continue Rapid Descent

While the homebuilder stocks have recently formed an uptrend on a large pickup in volume, the outlook for the actual real estate market in 2008 has cratered. The CME has housing futures that track the S&P/Case-Shiller Median Home Price indices. Over the last 3 months, investors have been sending the November 2008 contracts much lower.

As shown in the charts and tables below, Los Angeles home prices are now expected to decline 16% from 11/07 to 11/08. The 11/08 contract for Los Angeles has fallen 15% over the last 3 months. The composite index of all 10 cities is expected to fall 10% from 11/07 to 11/08, down 7% over the last 3 months.

There are a few cities not expected to fall too much though. Chicago and New York are expected to fall less than 5% by this November, and the New York 11/08 contract is actually up 2.32% over the last 3 months.

Expectations have clearly become very negative for housing this year. We wonder if 11/08 is the capitulation point?

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