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Dec. S&P Case-Shiller Home Price Index: 20-city index -1% M/M, vs. -1% in Nov. -4.1% Y/Y -...

Dec. S&P Case-Shiller Home Price Index: 20-city index -1% M/M, vs. -1% in Nov. -4.1% Y/Y - the lowest annual growth rate since Q3 2009. The index declined 3.9% in Q4. "Despite improvements in the overall economy, housing continues to drift lower and weaker."
Comments (13)
  • MarketGuy
    , contributor
    Comments (3983) | Send Message
     
    Housing, a real indicator of economic conditions, continues its "truth tour".
    22 Feb 2011, 09:19 AM Reply Like
  • wyostocks
    , contributor
    Comments (8852) | Send Message
     
    Sure looks like a double dip to me.
    Time for another home buyers tax credit. The first one fixed the problems so well lets do it again.
    22 Feb 2011, 09:23 AM Reply Like
  • bbro
    , contributor
    Comments (10609) | Send Message
     
    S&P Case/Shiller 20 December 1999 100
    Average wage per nonfarm payroll employee 35.530

     

    S&P Case Shiller 20 December 2010 142.16
    Average wage per nonfarm employee 50.004

     

    The catch is unemployment rate 4% then 9% now....
    22 Feb 2011, 09:53 AM Reply Like
  • Conventional Wisdumb
    , contributor
    Comments (1802) | Send Message
     
    bbro,

     

    Are those inflation adjusted wages?

     

    A lot of the inflation that we saw in the past 10 years was in housing so a lot of that wage increase went to increased shelter costs.
    22 Feb 2011, 10:02 AM Reply Like
  • mikeybronx
    , contributor
    Comments (382) | Send Message
     
    I think much of the increased shelter costs were the direct results of people living high on the hog and overleveraging themselves by taking out home equity loans for pleasure and not necessity.
    22 Feb 2011, 10:15 AM Reply Like
  • bbro
    , contributor
    Comments (10609) | Send Message
     
    Case Shiller is not inflation adjusted...so the wages are not inflation adjusted....apples to apples...Also 30 year mortgage rate was 7.91
    in December 1999....
    22 Feb 2011, 11:44 AM Reply Like
  • Conventional Wisdumb
    , contributor
    Comments (1802) | Send Message
     
    bbro

     

    "The indices have a base value of 100 in January 2000; thus, for
    example, a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the subject market."
    www.standardandpoors.c...

     

    The index allows you to compare the rate of appreciation in housing versus the rate of inflation during that period and as you know housing prices diverged dramatically from the long term trend. Housing rose on average at the rate of inflation historically prior to the beginning of 2000.

     

    For it to be apples to apples you would to have an index of some type on the base wage rate. I was under the impression that during the lost decade of the Bush years that wages stagnated yet your figures show a 40% plus growth rate.

     

    For an apples to apples comparison, we would need something like an afforability index which compares a ratio of wages to average housing cost over that period of time. That might do the trick.

     

    Anyway not being contentious just pointing out that asset inflation is a just another form of inflation especially when it is in one of the assets that is most widely owned by Americans. If housing costs outstrip wage growth this feels inflationary to most people especially if it is ephemeral.
    22 Feb 2011, 12:24 PM Reply Like
  • bbro
    , contributor
    Comments (10609) | Send Message
     
    "during the lost decade of the Bush years that wages stagnated yet your figures show a 40% plus growth rate."

     

    I believe the source of stagnation you are quoting is on an inflation
    adjusted basis...Basically My belief is House prices have dropped
    to a reasonable relationship to income....mortgage rates are certainly
    lower...BUT....the unemployment rate is way above average ( and
    unemployment rate correspnds well to mortgage delinquency rates)

     

    And months supply is out of whack...but to me it is hard to draw
    a national analysis ...look at your particular zip code on Trulia.com and you will see the wide disparities in foreclosed homes...Hint: you dont
    want to have to sell a home in 89031....
    23 Feb 2011, 08:08 AM Reply Like
  • Conventional Wisdumb
    , contributor
    Comments (1802) | Send Message
     
    "-4.1% Y/Y - the lowest annual growth rate since Q3 2009."

     

    Is that an oxymoron?

     

    Just being literal but it seems odd to juxtapose a negative rate of change with a term like growth rate - perhaps "decline" might be more appropriate.
    22 Feb 2011, 09:59 AM Reply Like
  • mikeybronx
    , contributor
    Comments (382) | Send Message
     
    Where does the numerous 1/4 built abandoned homes that are scattered all over the place fit into this housing equation?
    22 Feb 2011, 10:01 AM Reply Like
  • marpy
    , contributor
    Comments (1246) | Send Message
     
    Housing has now fallen to a level where the average Walmart employee can now really afford to buy one. Yes we may have a bunch of foreclosures still to go but the average American can now afford to buy a house and this tells me that the "sky is falling crowd" is wrong!
    22 Feb 2011, 07:33 PM Reply Like
  • kobio
    , contributor
    Comments (21) | Send Message
     
    I disagree that an average Walmart employee can buy a house, but if it is true, the sky has definitely fallen.
    23 Feb 2011, 02:22 AM Reply Like
  • MarketGuy
    , contributor
    Comments (3983) | Send Message
     
    That is a ridiculous statement Marpy. The "average American", has a long way to go to be able to afford housing with current employmernt to wage and real inflation data. The sky isn't falling, but the storm hasn't passed either.
    23 Feb 2011, 08:49 AM Reply Like
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