Chain-store sales softened in the Sept. 22 week, according to ICSC-UBS's tally of same-store sales that showed a 1.0 percent week-on-week decline for a 2.4 percent year-on-year pace that is down 5 tenths from the prior week's pace. The report said higher gas prices are hurting sales in general while warm weather is hurting sales of seasonal apparel. Redbook is up next.
Redbook:
First ICSC-UBS now Redbook are reporting soft sales for the Sept. 22 week, a week hurt by warm weather, which is bad for cold-weather apparel, and high gas prices. Same-store sales were up only 1.6 percent compared to the prior year, about 1 full point down from recent trend. But both reports in August were above sales as reported by the Commerce Department. Consumer confidence data from the Conference Board later this morning will offer a more market-moving view of the consumer.
When I was looking at homes in August it was amazing how many people were sticking to their original price even though their property had been on the market 6 months +.
I understand the impulse, but if you're 100k about the current market then you may as well stop wasting your agent's time.
Prices still have a long way to fall before this is through.
Metrics Wonk -- I like to keep my eye on a particular complex of condos that's not too far from my house here in South FL. There are enough units spread between a couple of buildings which are all relatively similar, give or take some upgrades and small differences in square footage. In other words, they provide a good snapshot for what is really happening, price-wise, for like property.
At the peak of the bubble, list and sale prices were in the $190s-low $200s. Recent comps (and list prices on units available for sale) are in the $130,000s-$160,000s. There are still quite a few units on the market, many of which have been listed for some time. I would expect more of those sellers will captiulate and lower prices to where they need to be over time.
I think the disconnect in perceptions is that many in the general public (and in the Housing Bubble-watchers community) were watching for a short, sharp correction when what we have is a long, slow decline. Home prices falling 4% y-o-y sounds about right to me--any declines will be shallow or localized, at least for now.
We will see much more dramatic movements in prices once the banks get serious about clearing their REO inventory. But that isn't the case yet, and I don't anticipate that happening until next year--the banks, like the general public, still have illusions of the housing decline bottoming out soon. At this point, I suspect nearly all of the decline is due to homebuilders slashing prices, although even there they've managed to keep the numbers inflated by hiding price cuts in incentives that don't show up on the price tag.
and with calls due, going to be one hell of a day...
So by this they see that consumer spending was actually down in july (since these are for July)before the credit markets seized in August, hmmm not surprising
fell the most on record in July, indicating the threat to consumer spending was rising even before credit markets seized up in August, a private survey showed today.
Shiller and case both feel a 50% decline in home prices back to prices 10 years ago is warranted. That would kill millions, or at least make them stay in their homes until whatever they have declined to catches up to the amount paid and stabalizes. Which means no equity for anyone for years if this is true. Except for those that have been living in their homes for 30 years, paid off, and have never pulled equity out.
But if its 20-30 % Like Roubini thinks the same thing applies just doesnt last as long. Inflation in house prices and high supply cause depression in housing market. Yet rest of economy remains strong on a week dollar? The world makes no sense.
U.S. Retailers' Sales Fell for Second Straight Week (Update4) - Bloomberg.com Consumers have been whipped back and forth like crazy,'' said Kurt Barnard, president of Retail Forecasting LLC in New Jersey.Money has become a commodity to be treasured.'' Lennar Reports Biggest Loss in Its 53-Year History (Update9) - Bloomberg.com Lennar Corp., the largest U.S. homebuilder, reported the biggest quarterly loss in its 53-year history after $848 million of costs to write down the value of real estate. The shares fell as much as 6.5 percent.
The third-quarter net loss was $513.9 million, or $3.25 a share, exceeding the most pessimistic estimates from analysts and suggesting the worst housing market in 16 years shows no signs of stabilizing.
Sales of previously owned U.S. homes probably fell in August to a five-year low, extending a slump that threatens to stall economic growth, economists said before the National Association of Realtors report. Figures from the Conference Board may show consumer confidence this month dropped to the lowest in 13 months. Both reports are due at 10 a.m. New York time Most U.S. Stocks Drop on Reduced Forecasts, Lower Home Sales - Bloomberg.com
It's funny to hear people ask why it's priced so low, it's pretty simple though, we need to sell it. Hopefully we will find someone here in our new location that needs to sell.
If you don't find somebody, wait a while.
Also are you moving up scale or down? I live in Midwest boondocks and have seen folks move in from the coast having sold a crackerbox and have so much equity they can buy a MUCH larger & nicer home and almost retire (LOL - half serious).
Oh and taxes here on those larger homes are still less than half of what they were paying (especially out east).
On the other hand if I sold my home & moved west and I got all the equity out it wouldn't pay the down payment necessary to keep me out of mortgage insurance... on a home half this size.
Where you go and where you come from makes a lot of difference in this market.
Where are you selling? We are looking for realistic sellers in MD.
Funny, wife and i went looking for new cars this weekend. only ones in every lot, every! Sunny cool day in southern MD and the salespeople were like black flies. All quoted aggressive financing...ha i bet, a lot full of 2007's. Wonder if they will change the terms for Qualified buyer? Even used lots were empty.
We went to Home Depot, all the pretty mums, etc, went inside empty..
we even parked on the front row, this was around 1-2 ish..
I give up. You guys won this round.
Sebastian | 09.24.07 - 7:37 pm
As much as your inch deep analysis pisses me off, this pisses me off even more. This isn't a boing match of opinion v opinion, this is ongoing analysis on what's going on and what's going forward.
Alec|.................
This is indeed a match of opinions. Economic systems define interactions between 6 billion people in earth. They are too complex and uncertain. Anybody, who thinks the future economic outcomes can be precisely predicted, is playing a fool's game. So, effectively we are all exchanging our deeply held beliefs about the future outcome in the system - inflation versus deflation, fed is powerful versus fed is toothless paper tiger, stock market will crash versus continue to go up, Christianity versus Islam - I can give you countless examples. At the end of the day, nobody is convinced about anything new, and leaves his own belief system intact. And why not - if the outcome turns out to be what is expected, you are right. If it is not, the economic events provide plenty of opportunities to walk out of the room with head held ahead. Did not expect a recession, but it happened? Oh, but 9/11 terrorist attack is unprecedented. Gold price went down instead of up? Central bankers are manipulating the market.
What this board has found is an unique group of people who think very alike. Be careful, when you consider it 'thinking'.
Case-Shiller Index is not a simple measure of median price sales--it's comparing same-home sales. So no, it's not primarily driven by builder discounts.
Opinions about an underlying reality... and in that it varies from examples you cite. At the end of a day of hunting you eat or you don't eat - there's a reality.
If not, the 4% nominal loss is at least 7% real, which means a 30% real decline (from the peak) in bubbly markets will take only 5 years. That would put most markets back on their pre-bubble trend.
In my suburb of Chicago, all spec home starts have come to a grinding halt. The only activity is the construction of homes being built by contractors with contract and cash - in hand. Those wanting and starting - a home now are people who still have money to burn; as these custom homes going up are spectacular!
So I can see where medium prices are somewhat holding their own in Chicago no (comparatively) lower cost spec homes being sold, while custom million-plus castles continue to sell.
My comments were directed more toward the aggregate of the various numbers--Case-Shiller, the NAR figures, homeseller figures, and regional figures. A lot of regions are continuing to report prices as being "flat, but not down"--my comment was that much of the real deterioration is being hidden in new housing incentives. A few people look at Case-Shiller, but not many--it's not a very popular index due to its tendency to be more honest than what many analysts care for.
The NAR median is the price that the general public watches, and it's stagnated but hasn't gone down. That will change once the disappearance of the jumbo market starts moving the median, and once the banks start pricing REOs to get them to move. The banks still believe the "flat, but not down" line, and consequently are--just like homeowners--holding out for prices that are six to twelve months old.
"at least make them stay in their homes until whatever they have declined to catches up to the amount paid and stabalizes. Which means no equity for anyone for years if this is true."
For recent "prime" purchasers, does it make any sense to continue to make mortgage payments for, say the next ten years, on an overpriced property (assuming no job loss as things deteriorate, etc.)? I think that is just starting to dawn on many people. As many on this board have said, we are just seeing the tip of the iceberg. Does anyone have any suggestions on what can or should be done to mitigate the disaster?
What this board has found is an unique group of people who think very alike. Be careful, when you consider it 'thinking'. - Sebastian
Ah but some thinking is more equal than others. A TantaRant or CRmegaChart has more quality think in it that most other entire blogs.
While it is common for a form of groupthink to develop over time, witness Ben's Blog, it is also more likely in this case that your not liking the answers is influencing your opinion as to the correctness of the answers.
I really like this site and all the news/analysis this site provided, very educational.
But this one makes me a little sad.
"... Biggest drop in 16 Years", what's this? you're using the CS composite-10 to make the point when most people use the composite-20. That's kinda misleading.
Do we really have to put a negative spin on everything? I constantly see you and Tanta trying to correct media's mis-reporting/bias, etc, but isn't this almost same thing? Technically you're reporting the truth, but using a less representative index to provide a negative spin is not what we need right now. The housing market is bad, we know it. That's enough.
drob,
The 20 City composite is only 6 years old so if you prefer the title could be "C-S Falls Most in Its Entire History." Feel better? The 20 year 10 city reportage was the less inflammatory.
Thanks for the good advice, Dryfly. We've moved upscale I suppose, from the Southern backwoods to a large city in the Midwest. I do miss those woods!
Good luck with your search Anonymous, sure wish we could help you out! I had hoped the REO's would need to move soon. Peripheral has squashed that hope like a bug, bless his heart!!
Sebastian, I don't think like most people, even the ones on here. It's kinda scarey... I should probably be looking for psychiatric advice rather than financial insight.
I guess you all know much more than most economists/analysts, since they're using the composite-20. And to get back to Robert Coté, it really doesn't matter if the composite-20 only has 6-years of history, the point is to accurately tell people how much the home price has been dropping. Trying to tell people how bad it is since the beginning of time using 1 number is way to simplistic for this blog anyway.
Sebastian: Note Charlotte (and Seattle and Portland) are the only ones up solid (Atlanta and Dallas up a smidge). So your optimism isn't delusional given your surroundings. Even here in Washington, which has had one of the biggest drops, the zeitgeist downtown is still cheerful - the real carnage has been in the outer suburbs. Truthfully, the stronger income areas with diversified economies will hang in better. But Florida, California, the dry West, and the Midwest will tip us nationally into a recessionary income pattern and then Chicago, Atlanta, yes even lovely Charlotte, get hit.
It really isn't the price - the collapse of financing contracted the money supply available for housing by double digits and as mbarty just said, the outer suburbs will typically suffer the most as those with money get their choices.
Now that you have the chart up - interesting how it shows strong industry (great product) in Seattle and Portland and NOT in Detroit. Its not that Detroit iron is not priced competitively, its just that the foriegn competition spends a higher % of the sales price on the product instead of old pension obligations. At least their housing costs are declining.
The price hasn't dropped enough, no matter what economist you ask!
notsurprised
And that is the root cause. As others have noted, the bubble mania is gone. Done. Over with. There is no recovery in 2008. The only question is how fast do we go down and when is the bottom.
I'm a bit shocked by DC, LA, and San Francisco. The last holdouts are falling.
And think, this is July's data! The credit crisis hit in mi-August. I guess we'll have to wait two months to see September's data. Oh well. It will be interesting, but out of date by then.
Yep Case-Shiller is "inflation" adjusted, though over the last few years we haven't had "inflation" since only rent gets counted in the fed's numbers.
I think most of the economists (ie GS) are talking about 20-30% real declines, but if "inflation" hikes up the real declines could be larger, even if the nominal prices just stay the same. Stagflation would be a real b!%(#.
joeblo - thanks. I agree that a number of things could make home prices decline farther than expected and possibly undershoot their "true" values - such as a major recession.
Case schiller is lagging - very. I've heard its the comparison of sales prices for the same home over time - so it may be a blend of same home sales with previous sales 1-10 years out. . . . would be rarely negative.
No, it is "told my husband and me that we" since told takes the objective case and that is "me" not "I". You would not say "she told I this and that" so why use "I" when you include someone else.
surprised? Not really, Are you?
Oh First?
Lance
today is remittance report day.i have heard early talk that losses are increasing and at increasing rate.nothing tangible to cite yet ....
Subprime is contained!
Chain store sales look really nasty this week:
ICSC-UBS:
Chain-store sales softened in the Sept. 22 week, according to ICSC-UBS's tally of same-store sales that showed a 1.0 percent week-on-week decline for a 2.4 percent year-on-year pace that is down 5 tenths from the prior week's pace. The report said higher gas prices are hurting sales in general while warm weather is hurting sales of seasonal apparel. Redbook is up next.
Redbook:
First ICSC-UBS now Redbook are reporting soft sales for the Sept. 22 week, a week hurt by warm weather, which is bad for cold-weather apparel, and high gas prices. Same-store sales were up only 1.6 percent compared to the prior year, about 1 full point down from recent trend. But both reports in August were above sales as reported by the Commerce Department. Consumer confidence data from the Conference Board later this morning will offer a more market-moving view of the consumer.
Home price = (rent-expenses)/(risk free return + risk premium)
Remember when news was news? September data might be September news. . . .OK maybe August.
I could read something like July v July final data showed ________. Early September returns show _____.
Pretty soon they'll use computers.
When I was looking at homes in August it was amazing how many people were sticking to their original price even though their property had been on the market 6 months +.
I understand the impulse, but if you're 100k about the current market then you may as well stop wasting your agent's time.
Prices still have a long way to fall before this is through.
Makes you wonder if August and September are going to be bloodbaths.
Metrics Wonk -- I like to keep my eye on a particular complex of condos that's not too far from my house here in South FL. There are enough units spread between a couple of buildings which are all relatively similar, give or take some upgrades and small differences in square footage. In other words, they provide a good snapshot for what is really happening, price-wise, for like property.
At the peak of the bubble, list and sale prices were in the $190s-low $200s. Recent comps (and list prices on units available for sale) are in the $130,000s-$160,000s. There are still quite a few units on the market, many of which have been listed for some time. I would expect more of those sellers will captiulate and lower prices to where they need to be over time.
I think the disconnect in perceptions is that many in the general public (and in the Housing Bubble-watchers community) were watching for a short, sharp correction when what we have is a long, slow decline. Home prices falling 4% y-o-y sounds about right to me--any declines will be shallow or localized, at least for now.
We will see much more dramatic movements in prices once the banks get serious about clearing their REO inventory. But that isn't the case yet, and I don't anticipate that happening until next year--the banks, like the general public, still have illusions of the housing decline bottoming out soon. At this point, I suspect nearly all of the decline is due to homebuilders slashing prices, although even there they've managed to keep the numbers inflated by hiding price cuts in incentives that don't show up on the price tag.
Odd, Shiller said 'deceleration in house prices' - sounds like a bullish spin from a moderate bear (perhaps careful bear - like CR - is a better term)
This isn't a deceleration, it's an acceleration in the opposite direction, no?
and with calls due, going to be one hell of a day...
So by this they see that consumer spending was actually down in july (since these are for July)before the credit markets seized in August, hmmm not surprising
fell the most on record in July, indicating the threat to consumer spending was rising even before credit markets seized up in August, a private survey showed today.
Shiller and case both feel a 50% decline in home prices back to prices 10 years ago is warranted. That would kill millions, or at least make them stay in their homes until whatever they have declined to catches up to the amount paid and stabalizes. Which means no equity for anyone for years if this is true. Except for those that have been living in their homes for 30 years, paid off, and have never pulled equity out.
But if its 20-30 % Like Roubini thinks the same thing applies just doesnt last as long. Inflation in house prices and high supply cause depression in housing market. Yet rest of economy remains strong on a week dollar? The world makes no sense.
S&P/Case-Shiller Home Price Index Falls 3.9% in July (Update4) - Bloomberg.com
Expired
U.S. Retailers' Sales Fell for Second Straight Week (Update4) - Bloomberg.com Consumers have been whipped back and forth like crazy,'' said Kurt Barnard, president of Retail Forecasting LLC in New Jersey.Money has become a commodity to be treasured.''
Lennar Reports Biggest Loss in Its 53-Year History (Update9) - Bloomberg.com Lennar Corp., the largest U.S. homebuilder, reported the biggest quarterly loss in its 53-year history after $848 million of costs to write down the value of real estate. The shares fell as much as 6.5 percent.
The third-quarter net loss was $513.9 million, or $3.25 a share, exceeding the most pessimistic estimates from analysts and suggesting the worst housing market in 16 years shows no signs of stabilizing.
Sales of previously owned U.S. homes probably fell in August to a five-year low, extending a slump that threatens to stall economic growth, economists said before the National Association of Realtors report. Figures from the Conference Board may show consumer confidence this month dropped to the lowest in 13 months. Both reports are due at 10 a.m. New York time
Most U.S. Stocks Drop on Reduced Forecasts, Lower Home Sales - Bloomberg.com
yeah!
what is the dark mass i see racing up to meet me as i free fall into the abyss?
It's funny to hear people ask why it's priced so low, it's pretty simple though, we need to sell it. Hopefully we will find someone here in our new location that needs to sell.
If you don't find somebody, wait a while.
Also are you moving up scale or down? I live in Midwest boondocks and have seen folks move in from the coast having sold a crackerbox and have so much equity they can buy a MUCH larger & nicer home and almost retire (LOL - half serious).
Oh and taxes here on those larger homes are still less than half of what they were paying (especially out east).
On the other hand if I sold my home & moved west and I got all the equity out it wouldn't pay the down payment necessary to keep me out of mortgage insurance... on a home half this size.
Where you go and where you come from makes a lot of difference in this market.
US Dollar taking a big hammering at the moment
Existing home sales down in August: SAAR = 5.5 M
ot surprised,
Where are you selling? We are looking for realistic sellers in MD.
Funny, wife and i went looking for new cars this weekend. only ones in every lot, every! Sunny cool day in southern MD and the salespeople were like black flies. All quoted aggressive financing...ha i bet, a lot full of 2007's. Wonder if they will change the terms for Qualified buyer? Even used lots were empty.
We went to Home Depot, all the pretty mums, etc, went inside empty..
we even parked on the front row, this was around 1-2 ish..
These are both signs to me.
Real estate always goes up?
I give up. You guys won this round.
Sebastian | 09.24.07 - 7:37 pm
As much as your inch deep analysis pisses me off, this pisses me off even more. This isn't a boing match of opinion v opinion, this is ongoing analysis on what's going on and what's going forward.
Alec|.................
This is indeed a match of opinions. Economic systems define interactions between 6 billion people in earth. They are too complex and uncertain. Anybody, who thinks the future economic outcomes can be precisely predicted, is playing a fool's game. So, effectively we are all exchanging our deeply held beliefs about the future outcome in the system - inflation versus deflation, fed is powerful versus fed is toothless paper tiger, stock market will crash versus continue to go up, Christianity versus Islam - I can give you countless examples. At the end of the day, nobody is convinced about anything new, and leaves his own belief system intact. And why not - if the outcome turns out to be what is expected, you are right. If it is not, the economic events provide plenty of opportunities to walk out of the room with head held ahead. Did not expect a recession, but it happened? Oh, but 9/11 terrorist attack is unprecedented. Gold price went down instead of up? Central bankers are manipulating the market.
What this board has found is an unique group of people who think very alike. Be careful, when you consider it 'thinking'.
Case-Shiller Index is not a simple measure of median price sales--it's comparing same-home sales. So no, it's not primarily driven by builder discounts.
PV:
Case-Shiller doesn't include new construction, so price declines are not just inventory clearing.
ELS
LEN
53 years of history , and they get caught in a bull trap...
cryin shame
"This is indeed a match of opinions."
Opinions about an underlying reality... and in that it varies from examples you cite. At the end of a day of hunting you eat or you don't eat - there's a reality.
Seb,
Take heart - just got green tape on the Dow!
Well, at least Moody's is way ahead of the curve on revamping its Subprime ratings model!
this should definitely avert any crisis!
US Edition - Financial News Online
Is the Schiller index inflation-adjusted?
If not, the 4% nominal loss is at least 7% real, which means a 30% real decline (from the peak) in bubbly markets will take only 5 years. That would put most markets back on their pre-bubble trend.
In my suburb of Chicago, all spec home starts have come to a grinding halt. The only activity is the construction of homes being built by contractors with contract and cash - in hand. Those wanting and starting - a home now are people who still have money to burn; as these custom homes going up are spectacular!
So I can see where medium prices are somewhat holding their own in Chicago no (comparatively) lower cost spec homes being sold, while custom million-plus castles continue to sell.
My comments were directed more toward the aggregate of the various numbers--Case-Shiller, the NAR figures, homeseller figures, and regional figures. A lot of regions are continuing to report prices as being "flat, but not down"--my comment was that much of the real deterioration is being hidden in new housing incentives. A few people look at Case-Shiller, but not many--it's not a very popular index due to its tendency to be more honest than what many analysts care for.
The NAR median is the price that the general public watches, and it's stagnated but hasn't gone down. That will change once the disappearance of the jumbo market starts moving the median, and once the banks start pricing REOs to get them to move. The banks still believe the "flat, but not down" line, and consequently are--just like homeowners--holding out for prices that are six to twelve months old.
"at least make them stay in their homes until whatever they have declined to catches up to the amount paid and stabalizes. Which means no equity for anyone for years if this is true."
For recent "prime" purchasers, does it make any sense to continue to make mortgage payments for, say the next ten years, on an overpriced property (assuming no job loss as things deteriorate, etc.)? I think that is just starting to dawn on many people. As many on this board have said, we are just seeing the tip of the iceberg. Does anyone have any suggestions on what can or should be done to mitigate the disaster?
What this board has found is an unique group of people who think very alike. Be careful, when you consider it 'thinking'. - Sebastian
Ah but some thinking is more equal than others. A TantaRant or CRmegaChart has more quality think in it that most other entire blogs.
While it is common for a form of groupthink to develop over time, witness Ben's Blog, it is also more likely in this case that your not liking the answers is influencing your opinion as to the correctness of the answers.
CR,
I really like this site and all the news/analysis this site provided, very educational.
But this one makes me a little sad.
"... Biggest drop in 16 Years", what's this? you're using the CS composite-10 to make the point when most people use the composite-20. That's kinda misleading.
Do we really have to put a negative spin on everything? I constantly see you and Tanta trying to correct media's mis-reporting/bias, etc, but isn't this almost same thing? Technically you're reporting the truth, but using a less representative index to provide a negative spin is not what we need right now. The housing market is bad, we know it. That's enough.
drob,
The 20 City composite is only 6 years old so if you prefer the title could be "C-S Falls Most in Its Entire History." Feel better? The 20 year 10 city reportage was the less inflammatory.
The 10 city index is widely credited with being a better leading indicator of housing trends.
I mean really...Charlotte?
Thanks for the good advice, Dryfly. We've moved upscale I suppose, from the Southern backwoods to a large city in the Midwest. I do miss those woods!
Good luck with your search Anonymous, sure wish we could help you out! I had hoped the REO's would need to move soon. Peripheral has squashed that hope like a bug, bless his heart!!
Sebastian, I don't think like most people, even the ones on here. It's kinda scarey... I should probably be looking for psychiatric advice rather than financial insight.
I guess you all know much more than most economists/analysts, since they're using the composite-20. And to get back to Robert Coté, it really doesn't matter if the composite-20 only has 6-years of history, the point is to accurately tell people how much the home price has been dropping. Trying to tell people how bad it is since the beginning of time using 1 number is way to simplistic for this blog anyway.
The price hasn't dropped enough, no matter what economist you ask!
Sebastian: Note Charlotte (and Seattle and Portland) are the only ones up solid (Atlanta and Dallas up a smidge). So your optimism isn't delusional given your surroundings. Even here in Washington, which has had one of the biggest drops, the zeitgeist downtown is still cheerful - the real carnage has been in the outer suburbs. Truthfully, the stronger income areas with diversified economies will hang in better. But Florida, California, the dry West, and the Midwest will tip us nationally into a recessionary income pattern and then Chicago, Atlanta, yes even lovely Charlotte, get hit.
It really isn't the price - the collapse of financing contracted the money supply available for housing by double digits and as mbarty just said, the outer suburbs will typically suffer the most as those with money get their choices.
Now that you have the chart up - interesting how it shows strong industry (great product) in Seattle and Portland and NOT in Detroit. Its not that Detroit iron is not priced competitively, its just that the foriegn competition spends a higher % of the sales price on the product instead of old pension obligations. At least their housing costs are declining.
The price hasn't dropped enough, no matter what economist you ask!
notsurprised
And that is the root cause. As others have noted, the bubble mania is gone. Done. Over with. There is no recovery in 2008. The only question is how fast do we go down and when is the bottom.
I'm a bit shocked by DC, LA, and San Francisco. The last holdouts are falling.
And think, this is July's data! The credit crisis hit in mi-August. I guess we'll have to wait two months to see September's data. Oh well. It will be interesting, but out of date by then.
Got popcorn?
Neil
Frederson-
Yep Case-Shiller is "inflation" adjusted, though over the last few years we haven't had "inflation" since only rent gets counted in the fed's numbers.
I think most of the economists (ie GS) are talking about 20-30% real declines, but if "inflation" hikes up the real declines could be larger, even if the nominal prices just stay the same. Stagflation would be a real b!%(#.
joeblo - thanks. I agree that a number of things could make home prices decline farther than expected and possibly undershoot their "true" values - such as a major recession.
4% down per year on a $400k 1B condo where I'm looking to buy is equivalent to me getting free rent on the apartment I'm in now.
Even if the LL keeps raising rent 10% per year it will take another 3 years before buying makes sense.
Case-Shiller index is a lagging indicator. That means that prices are down much more than the index suggests. SoCal down double digits...
Case schiller is lagging - very. I've heard its the comparison of sales prices for the same home over time - so it may be a blend of same home sales with previous sales 1-10 years out. . . . would be rarely negative.
grammar lesson for notsurprised:
"told my husband and I..."
No, it is "told my husband and me that we" since told takes the objective case and that is "me" not "I". You would not say "she told I this and that" so why use "I" when you include someone else.
Be careful, when you consider it 'thinking'.
One can think anything one want, the most important thing is to know why you think it is true.
Home bias is what I see in your post Sebastian, everything is great here. Well your here is just a small part of the US and just a dot on the globe.
Gosh, you're from KC aren't you James?
Durrrr-thanks for catching that. I meant lagging.