Inquiring minds are pondering a few charts from my friend “TC” who has plotted the Case-Shiller price history since 1995 for 20 cities. Please click on any chart to see a sharper image.
Absolute Price History 10 Cities
Absolute Price History 10 Additional Cities
Relative Price History 10 Cities
Relative Price History 10 Additional Cities
May 2009 vs. April 2009
Much has been made about prices “hitting bottom” and the market showing signs of stabilization. However, when one dives just a bit deeper into the numbers, it appears the increases are not much more than seasonality.
Another reason for the small price incline on a month-over-month basis is that May 2009 data is the first full month of data since the Federal $8000 Tax Credit took effect (the bill actually passed in mid-February, so March was the first complete month, but escrows aren’t typically closed and sells recorded until May).
In order to showcase how small these price increases actually were in dollar terms, I’ve included a new chart which the price differences of May 2009 vs. April 2009 for all 20 cities tracked by Case-Shiller. The changes range from a gain of $5,800 in San Francisco to a continued drop of $1600 in Miami – no city experienced an increase any where near the $8000 Federal Tax Credit.
Median national prices have now fallen 32% peak-to-trough over the past 3 years or $80,000. In the 20 cities that Case-Shiller tracks prices have fallen from 8% in Dallas to 55% in Phoenix. Price declines are highest in CA, NV, AZ, FL and Detroit. In nearly all of the cities prices have now declined back to early 2000 prices and thinly traded futures data points to a bottom occurring in the next 12 months.
It is important for readers to know that Case-Shiller uses a Repeated Sales Methodology (RSM) which provides the most accurate housing data available. Additionally, there are two newer columns titled “Price Level” which show both the last time prices were at the current level and what price level prices are projected to decline to based upon the CME Futures market.
Once again included absolute and relative price charts. The relative charts are based upon a year 2000 equal point for the 20 cities and the absolute price chart helps to show the current price declines.
At some point housing will bottom. The key question is “what then”?’ I surmise in real terms housing will be negative for a decade given the last bubble is never reblown. Look at the Nasdaq for a prime example.
Mike “Mish” Shedlock
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