June Case Shiller numbers

[WestSideBilly]

Seattle down 7.1% YOY, 7.3% from peak (July 2007).


Phoenix, LA, SD, SF, Miami, and Vegas all take hits. Some other markets appear to have found their floor (Dallas, Cleveland, Charlotte, Atlanta, Denver), though most of these are in range of 25-35% increase since 2000.

[Robroy]

Since we are behind the trend with this thing, other markets apparent finding a bottom can be a good thing. However, if the other elements of this economic perfect storm pick up steam, this could be a dead cat bounce in those markets.

As one commentor said a few months ago, the economic pendulum continues to swing, one way, then the other. But pendulums don't stop at equilibrium.

[WestSideBilly]

A few of the markets have the look of a dead cat bounce.


What's interesting is that most of the flattening markets are settling in at around 125-135, which is basically 3% annual increases since 2000. If Seattle prices continue to decline for two years, we'd need to lose another 30-40% to get down to 3% inflation range.

[Robroy]

[lamont]

Looking at month by month fluctuations in seasonally adjusted statistics is kind of worthless. The seasonal multiplier just adds more uncertainty to the already uncertain measurement, amplified by month-to-month noise in the statistics.

And flattening out in the summertime is also not inspiring. The housing market (even with seasonally adjusted numbers) is always stronger in the spring/summer months and sucks in the fall and winter. I wouldn't call the bottom until I see a floor forming in Dec/Jan in addition to Jun/Jul.

Economically, we're also in a post-rebate-check post-oil-decline bit of euphoria while the rest of the world is sliding into a recession. There's going to be a reality check when companies are hit by exports due to the global recessionary environment and by a strengthening dollar making euro-priced revenue look worse (e.g. Amazon does well in falling-dollar environment, they should look worse in a strengthening-dollar environment). I'm expecting a double-dip and we've only gone through the first dip. We should see global recessionary fears, more companies going under and CDS derivatives issues hit the front page before this is all over. FNM, FRE, credit and housing are kind of rearwards looking -- although I think the housing market is going to fall further as more companies implode in 2008/2009 and people lose their jobs.

Also, the uptick in housing starts recently didn't impress me very much. We're still producing 1 million homes per year on an annualized basis which is larger than annualized home sales and as large or larger than the growth of households driven by population growth. Those numbers are still out of supply/demand balance. As the economy gets bad again in 2H 2008, the new housing starts are just going to fuel oversupply again which is going to trash housing again in Dec/Jan when the bottom seasonally falls out.

And following bubble dynamics, the bottom should overshoot. We're just barely hitting points where fundamentals (rents, salaries) should be propping up housing in a few markets. We need to hit the point where we've got some insanely cheap markets and Mr. Market is way too depressed compared with fundamentals before the bubble will be over.

[Robroy]

[The Tim]

All the wildly off-topic stuff about the presidential election has been split to its own thread in the forum:

Sorry, I would have done this sooner but I didn't realize I had the ability to split topics like that!