Case Shiller Index down 15.3%

As scary as these depreciation numbers sound when they are compare with what these same cities experienced in appreciation for several years they should not be considered a surprised. When the real estate market was appreciation at annual clips of 20% per year a correction had to happen. The only thing that surprises me is that the guys making the big money on Wall Street and tin the Commercial Banks forgot the very basics of markets fluctuate up and down. One could reasonably expect that with the pace of appreciation that at least a 20% correction was in order.

I agree with you 100% Mike. The markets showing 20% correction showed
appreciation above 50% y/o/y in many instances. It is the banks who forgot
a correction was in order and the American public was more than happy to
take the easy money at the top...

Your summary is blatantly incorrect.

"Every market in the 20-market survey lost over the past month. "

This is completely wrong. 8 out of 20 markets had price INCREASES over the past month. If you aren't go to read the data before analyzing it your analysis is worthless.

sorry bill - thanks for catching the typo - i meant year. fixed now.

Analysis is correct. The data table is WRONG. See the link you provided to S&P CS.

Actually I made a mistake saying "month" when I meant "year" from the PDF:

"One possible bright side to the annual figures is that three MSAs – Chicago, Cleveland and Denver – while still negative, showed some improvement in their annual figures over those reported last month. Looking at the monthly statistics, eight areas were positive for the April-over-March reading."

Bill, who in their right mind cares a lick about M/O/M Data? It is completely WORTHLESS!!! Y/O/Y Data is what is relevant now and always really has been. ONLY when a market is calm and steady with no seasonal adjustments would the M/O/M data be useful and that has not happened for years!!!

This is in line with most economist calling for a 30% (some 40%-50%) fall from peak. We need to apply inflation into that number off course. I see this pattern continuning into the Fall easily with some bump ups in the areas most under water due to REO and Auction Sales that are counted in the numbers (unlike the inventory which is not).

The entire idea that this could be corrected quickly without severe pain was crazy from the start and anyone that called for that should be ashamed of themselves. I don't see housing coming back to inflationary 2%-4% gains per year personally until 2015 or so. We may have a bump one year or two in between like around 2012.

Resets coming in ALt-A, and Prime are going to take us right on through 2010 and comps are getting crushed out there which is only making things worse. Mounting job losses don't help and neither does the bloated inventory that exist. Not to mention the shape of the financial industry or should I say lack thereof... they have yet to fall and fall hard they will with many bankruptcies in that segement.

Condo's have yet to get hammered in all the major cities, which they will soon enough. It started for them a month or so ago. They always feel the pressure last and fall the most if history is any guide. A lot left to happen before this ship gets righted...

Stu - I agree with you. Reports like UCLA Anderson's report that are
calling bottom are reckless. No consideration to the Alt-A reset wave is
inexcusable and I feel will be far worse than the subprime mess...

Real people who are buying homes care about MoM data, they are the ones are actually paying more money this month to by homes than they could have last month. I care about MoM data because it gives me information on a scale shorter than 12 months, which is far from worthless. Case himself cares about MoM data.

I apologize for my poorly worded comment. I followed a link here from another popular mortgage blog. The headline quoted your original incorrect wording. There was no data or analysis. Without following the link and looking independently readers would have an incorrect understanding of what today's data showed. I'm sure this wasn't intentional but bloggers so readily accept gloomy data that it rarely gets a fair review. Positive data would certainly never be posted or linked without a serious review.

There is so much justified doom and gloom out there that reporting accurate contrary evidence isn't going to swing anyone's outlook. I have found that real contrary data is dismissed or misintepreted consistently on mortgage blogs. I'm new to this blog in particular so I don't want to imply that I've seen it here or that this particular post is an example.

In talking with traders today, Wall Street almost unanimously thinks the data today was better than expected. It does't mean housing prices are going up next month. It doesn't mean that gloomy market predictions are wrong. But this was a real (albeit minor) surprise to the UPSIDE for Wall Street. That is news that no one seems willing to post about.

Thanks Bill for you comments. It was a small positive as traders were
thinking that the report would show 16% y/o/y instead of 15.3%. My blog is
very much dedicated to the unwinding of the ponzi scheme known as the
national housing bubble. The reason I focus on this aspect of the problem
is to hopefully educate enough people of what the ramifications of bubble
mentality look like so that when we get to this point again perhaps people
will be a bit smarter.

I think there is plenty of cheerleading both from the NAR and mainstream
media and pundits looking to be the bottom caller that a dose of reality is
what is still called for in this circumstance. Thanks for reading, visiting
and participating.

Bill, with all due respect you are either completely blind to what is going on or naive as he%& to it... I have not quite figured out which one it is yet, but I will in a few more post.

Real people buying homes right now are idiots plain and simple. Their is nothing that forces you to buy a home, but plenty (especialy right now) that forces you to sell a home! It is a total buyers market with inventory 5-6 months or more period!

In each and every down period in this country their are always 2 setsof folks that get burned. The late to the party speculators and investors and the too early back to the party crowd. In almost all dips like we are in their is a pause (the hopefulls) and then the continued downward spiral. Many get caught up in this false recovery period and lose it all. We have much farther to fall my friend.

There is so much justified doom and gloom because it is... well quite frankly justified. Things are really bad and just because the MSM doesn't choose to tell the truth about things and the bought off liberal sheeple report what they are told to, doesn't make it true. They are scamming you and anyone else they can with their views in hopes they lose less and you lose more. Too bad for the MSM that the consumer is now officially tapped out! This game is over and no more pawning it off to the middle class... heck the middle class has shrunk considerably as a result of this mess.

EVERYTHING is tanking and ANY report that says otherwise is only self serving and not the truth IMO at this point!!!

Stu,

With all due respect I doubt that you have the inspired opinion to deem when someone should buy a house. Home Affordability is now the best its been in years. Interest rates are lower now than they are expected to be next year. Home prices are down 15.3%. As stated here one can buy a home at prices not seen in 4 years.

Even if prices do continue to drop further as sure as God made green apples they will rise again. And when they do they almost certainly rise higher than ever before. Look it up in the history books. Study the real estate downturn of the mid 70s, the early 80s and the late 80s. Its not like our population is declining. We simply overbuilt and have too much supply at the moment. It wil take another year or two for the oversupply to be worked off with the present rate of new construction starts.

Perhaps you would rather the customers rent for a few more years, hope that prices drop another 5-10% and then pick them up with a financing rate 150 basis points higher than they are now.

Nows a great time to buy a house if you can qualify for a mortgage. I for one would urge anyone in my market (philadelphia) to buy and enjoy the many benefits of home ownership.

We are 5 years from a true turn around in prices. I have bot/sold since 1980. When rates rise houses will get cheaper. Affordability is nowhere near where it needs to be. Houses in my area will drop 40-50% from peak for a myriad of reasons, and now is not a great time to buy. Not even close

I think most any broad brush statement about what the "market" will do as a whole or whether or not it is a good time to purchase property is both necessarily wrong and a bit too alarmist. I advise real estate investor's everyday and my advice to them is and should be sharply different than advice to Joe and Sally buying a house.

There is certainly a heavy downturn in this bloated market and I feel there is more to come. However, the old axiom of real estate is Location, Location, Location and it is no less true in this market than any other. Investors must be cash rich and pick their deals very very carefully with an eye on holding for 2-3 years or more. I don't think anyone here or anyone with a brain expects real estate to go down and never come back. If you don't catch the "bottom" then join the crowd. No one catches the bottom except by blind luck. You try to buy just before the turn around or just after it, but either way you are essentially in the same boat (with the exceptions of possible holding costs, and tax ramifications). Investors can certainly find some excellent deals out their right now. They can no operate on the model that they are going to buy rehab and flip as they have done in recent years. This market is for investors with some depth to hold their purchases.

Those buying a home to live in should ABSOLUTELY take advantage of this market. People are foolish to look at the home they live in as an investment. It is an appreciating asset yes, and investment NO. Investments are bought for the purpose of appreciation and sale. Homes are bought to live in, appreciation is nice and preferable when you are ready to sell. You sell an investment when it reaches a target value, you sell your house when you need to move. So, the tax advantages, interest rate advantages, stability advantages, and many other advantages far outweigh any "investment" concerns when Sally and Joe are buying a house.

Let me tell you, if my investor pool has strong cash and we can purchase beach property in Florida for 50% of what is was selling for last year, we will BUY! Then we will mitigate our debt service by whatever cash flow we can generate and I'll bet any of you my house that in 5 years we will make a healthy profit. LOCATION, Proper Liquidity, and a Proper time horizon are the keys.

I know most of you are astute enough to know that these broad brush statements do not apply to everyone in every situations so lets acknowledge the bright spots for the right investors/homeowners in even this market.

Even if the great depression there was money to be made if you had the cash to scarf up the deals and sit on them. Let's not panic, the situation is somewhat dismal but not hopeless. When everyone starts moaning about hopelessness it's probably time to buy because the bottom is near.