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Case Shiller Home Price Index
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For March 2010:

"Home Prices Edge Down as Tax Credit Fails to Lift Market"

"Home prices fell in March from the previous month, signaling that temporary tax credits for buyers weren't enough to buoy the housing market."

"Nationally, prices have climbed nearly 3 percent from their April 2009 bottom. But they remain nearly 31 percent below their July 2006 peak.

In the first quarter of 2010, U.S. home prices fell 3.2 percent compared with the fourth quarter. "

http://www.cnbc.com/id/37332980

New York one year change: -2.4%

http://www.standardandpoors.com/spf/docs/case-shiller/CSHomePrice_Release_052506.pdf

Case Shiller has almost nothing to do with the Manhattan market because it doesn't include co-ops. In this borough, we've seen strength going from 4Q 2009 to 1Q 2010.

ali r.
DG Neary Realty

Does a 1000 point plus drop in the stock market have anything to do with Manhattan RE? how about a fall in the euro eliminating foreign buyers. Wage reductions? Increased supply? Increased taxes? Bank reform? Increasing interest rates? Increasing Maint fees?

Is there any “economic” indicator that is positive for Manhattan RE? If I could bet on a continued price drop I would.

Ali,

Let me respectfully disagree with your assertion.

For the record, your disclaimer could be expanded, as the Case-Shiller Index (CSI) ALSO excludes condos and multi-family buildings - so yes, it is far from the perfect measure of Manhattan RE. For that matter, it also excludes the sales of NEW RE as there is no reference point to gauge its value.

Nonetheless, among the statisticians I know CSI NY is considered the best index for gauging the change in values in the NY Metro RE market. If you can provide an alternative, I would be happy to consider it. The only other measures out there (see Jonathon Miller) are for average and median value of certain Manhattan properties, but average and median have more to do with changes in the composition of the market than they do with change in valuation across time. Until you provide an alternative to CSI NY, I intend to use it as the best measure of change in RE valuation across time which is available.

For the record, CSI NY (NOT Seasonally Adjusted) hit another 6 year low with the data released today. The last time the index was lower (than the March 2010 value of 169.42 released today) was April 2004.

I know that you personally believe that the Manhattan market is going up, but I fear that you suffer from what statisticians refer to as the "Lake Wobegon" effect. ("Where all the children are above average...")

http://en.wikipedia.org/wiki/Lake_Wobegon_Effect

CSI NY (Non-Seasonally Adjusted) Since Jan 2004 (Note that there is a lag in the release of data, so the data released this morning is for MARCH 2010, not April.)

January 2004 163.63
February 2004 164.92
March 2004 166.61
April 2004 168.30
May 2004 170.52
June 2004 172.90
July 2004 175.74
August 2004 177.93
September 2004 179.79
October 2004 181.90
November 2004 183.69
December 2004 185.16
January 2005 187.19
February 2005 189.29
March 2005 192.17
April 2005 194.10
May 2005 195.96
June 2005 197.77
July 2005 199.86
August 2005 202.33
September 2005 204.83
October 2005 207.64
November 2005 210.30
December 2005 212.68
January 2006 213.50
February 2006 214.47
March 2006 214.33
April 2006 214.97
May 2006 215.57
June 2006 215.83
July 2006 215.25
August 2006 214.34
September 2006 214.09
October 2006 214.29
November 2006 214.24
December 2006 213.79
January 2007 212.78
February 2007 212.52
March 2007 212.40
April 2007 211.62
May 2007 210.51
June 2007 209.49
July 2007 208.37
August 2007 207.18
September 2007 206.39
October 2007 205.54
November 2007 204.38
December 2007 202.09
January 2008 200.44
February 2008 198.31
March 2008 196.52
April 2008 194.72
May 2008 194.23
June 2008 194.74
July 2008 193.70
August 2008 193.48
September 2008 191.66
October 2008 189.66
November 2008 186.52
December 2008 183.45
January 2009 180.93
February 2009 177.84
March 2009 173.60
April 2009 170.69
May 2009 171.17
June 2009 172.37
July 2009 174.15
August 2009 175.44
September 2009 175.10
October 2009 174.55
November 2009 172.68
December 2009 171.86
January 2010 171.38
February 2010 170.57
March 2010 169.42

1stQ '09 $1259
2ndQ '09 $1056
3rdQ '09 $ 996
4thQ '09 $1051 sales 2473
1stQ '10 $1038 sales 2384

Not sure exactly what your seeing Ali.
I think you need to take "in contracts" figures as more "wishful thinking."

http://www.millersamuel.com/reports/pdf-reports/MMO4Q09.pdf
http://www.millersamuel.com/reports/pdf-reports/MMO1Q10.pdf

In this borough, we've seen stubborness to hanging around $1000 per sq ft. Not unlike a 10K Dow.

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sisyphean, saying that an index that doesn't include co-ops and condos is "the best we can do" to gauge value is like saying my weight is a predictor of my income. There might actually be a relationship, but surely I can use more straightforward measures -- like going out in the marketplace and seeing what I'm selling -- to predict my income.

Similarly, I think that even my individual market experience is worth something when we're talking about the Manhattan market. How much it's worth is obviously debatable, but I do posit that it's worth more than Case Shiller, because at least I can see a leg of the elephant, and Case Shiller is talking about a zebra.

Case-Shiller looks at single-family houses, of which, frankly, there are not a lot on the Upper West Side or in Battery Park, and even fewer that trade. I understand that you guys think I'm biased because I'm in the industry and I'm a bull, but I honestly think paying attention to the resale price of houses in Marble Hill, if you want to figure out what's happening to a two-bedroom Yorkville apartment, is beyond silly.

beastbron, I think your "wage reductions" probably is the best tracking indicator of any that you mentioned, because long-term, RE does indeed follow jobs. However, if you want to make the bear case for Manhattan RE, jobs and wages have to stay down for the next few years, and I'm not sure that's going to happen.

But I freely admit that I don't have a crystal ball.

ali r.
DG Neary Realty

I heard somewhere that Case-Shiller includes data from Wayne, NJ. I also read somewhere that what happens today in Wayne, NJ will help us predict what will happen in Manhattan on this day two years from now.

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only 2% of the sales market in Manhattan are single family homes. So Case Shiller only includes 2% of Manhattan sales, not to mention that those 2% are a meaningless amount of the total Metro NY area sales. So the index essentially ignores Manhattan - but sure, go ahead and use it. Go ahead and bid 2.4% less for that Manhattan co-op than it would have sold for 1yr ago and see how far you get.

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Average price of a coop a year ago (2ndQ '09) $917 psqft
http://www.millersamuel.com/reports/pdf-reports/MMO2Q09.pdf

Co-ops for sale
in Manhattan
We found 5,935 listings
Median price: $695,000 Median size: 900 ft² Median price per ft²: $800
Information on Manhattan

FLMAO

"Well, certainly a better predictor than the data the bulls used which was"

Well the bears have used all of the following as a predictor of Manhattan real estate and have been wrong:

1) Strengthening of the Euro
2) Lower bonuses
3) A global financial meltdown
4) Miami
5) Price to rent
6) Lower rents
7) it will happen next year / month / day
8) China
9) Case-Shiller
10) Brooklyn
11) no reason
12) made up economic conclusions
13) cap rates
14) gold
15) lemmings
16) toilets
17) cherry picking three of four sentences out of articles to support a lopsided claim
18) any press that said things were bad (while discrediting the same press that said things are good)
19) chocolate prices in Brazil
20) banking moving to Charlotte
21) everyone moving out of Manhattan
22) the end of the world
23) the art bubble
24) tax increases
25) Obama
26) Wayne, NJ
27) Chicago
28) No more hedge funds
29) retail banks changing compensation at investment banks
30) and another 100 reasons that have been wrong.....

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wow truth, i've been giving you too much credit - you do understand the difference between average and median, right? From that same report you linked to - Median price of a co-op: $649,000.

I would say LMFAO, but I get no pleasure from outsmarting a 5th grader

swe, we know you're not too bright, but JuiceMan isn't claiming that these things never happened (because yes, China actually does exist, as does Obama). He's listings things that have been pinpointed as catalysts for real estate prices moving sharply in one direction or the other (mostly way way down though). Some (though not all) are indeed worthy of being mocked.

swe, just waiting for the 50% off that everyone was predicting.

There is no way the real estate market is going anywhere but down. Has anyone seen any positive economic indicators lately?

juice - you forgot about skyrocketing interest rates, especially once the Fed stopped buying mortgage notes. that's my personal favorite catalyst for the impending doom.

Printer I most certainly do.
1)Of course a field of 728 does get you closer to a truer average instead of the countless examples on this forum of a) is so much b)is so much c) is so much d) is so much
2)THe report cites AVERAGE price per square foot, not MEDIAN price per square foot. It also has BOTH average sales price(1,068,726) and median sales price(649,000)

SO even on direct comparison of median CLOSINGS price of a year ago at $649,000 and a current makret snapshot SE listings..............
We found 5,935 listings
Median price: $695,000 Median size: 900 ft² Median price per ft²: $800
Information on Manhattan
...............at $695,000 for ASKING median prices today, a 6.7% difference is clearly damn close. Certainly when you consider the average between final asking and final sale (median or not) to fall in the minus 8/10% range.

The fact that you think one couldn't get an apartment for 2.4% less than it would have gone for 1 year ago, is downright full retard. With a cherry on top.

BTW, when manhattan finally (2, 3 years from now?) starts heading north in price, you'll be quoting from the same millersam report. ANd I'll be happy when that happens. I don't want this city to fail.
It's just I know it's going nowhere until it properly corrects. The sooner the better.

so - to set the record straight: here are all of the ways in which the Case Shiller Index is NOT applicable to Manhattan

http://theapplepeeled.com/buyers/how-relevant-is-the-case-shiller-index-to-manhattan-and-nyc/

case shiller has a condo index which includes new york city.

well if you understand the difference, then shame on you for purposely conflating the figures.

but even so, you are not apples/apples, as SE are current asks, whereas M-S #s are for already closed. And there is a substantial time lag, as you well know, not to mention the meaninglessness of asking prices. So the more accurate way to figure out the difference between where stuff traded in Q209 and Q210 will be to wait for the Q310 report and compare that to the Q309 report.

very sloppy stuff

Why Case-Shiller is useless for Manhattan (quotes Jonathan Miller, Urbandigs, and streeteasy)

http://therealdeal.com/newyork/articles/how-credible-is-case-shiller

der - you're right, there's a condo-only index but ... guess what: no co-ops in it .... AND that's not the index that's most often cited (in fact, I don't feel like I've ever seen it cited) That's where the issue comes in: you see headline numbers in the NYT, curbed, Real Deal, etc. all referring to this index in which: condos are not included, coops are not included, new dev is not included, multi-family homes not included ... that leaves all of 1% of the market left, if that

OK class - sit up straight and pay attention to the teacher! I'm not sure where to start since so many of the students posting here seem to lack a grasp of basic social research methods and terminology.

Ali, Juiceman, Honeycrisp, et al. - before you make any more comments here in class, you need to do your homework and read the following piece on "Longitudinal Studies" especially in regards to how they differ from "Cross-sectional Studies."

http://en.wikipedia.org/wiki/Longitudinal_data

While the Lake Wobegon effect is clearly visible here, and each of you (and everyone else for that matter) is certainly well above average in your understanding of statistical methods, in your own very unique and unsophisticated way, you keep arguing that the Case-Shiller Index is a VERY bad "cross-sectional" study because it doesn't include Coops. Well, CSI was NOT designed to be a "cross-sectional study,” it was DESIGNED to be a "longitudinal study."

So even though you are ALL well above average, none of you comprehend the difference between longitudinal and cross-sectional analysis which is the subject of this thread/exam, so I am forced to flunk all of you. If you like, you can call me names, come up with yet more spurious analogies, spew additional non sequiturs, throw in some new canards, and point out more extraneous and irrelevant factoids. None of this will change the fact that CSI is the ONLY longitudinal study of home price valuations we have for the NY Metro.

If and when you've done your homework, and have learned what a longitudinal study is intended to do, you can then come back to class and try to explain to the teacher why Coops and Condos in Manhattan have MAGICALLY behaved differently in their price valuations over the past few years than single family dwellings in the same metropolitan area.

Class dismissed.

now do we have to get into the differece between correlation versus causation? really?

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honeycrisp, because case shiller condo index is an index without a monatary unit, it won't matter (to any real degree) that coops aren't covered.

"Class dismissed."

This post wins the donkey meat award for crap percentage per sentence. If I sat in a classroom with you sisyphean, you would have wads of spitballs in your hair and a wedgie so bad you would burp fruit of the looms.

Printer
If you'll notice, Im always referring to miller sams q reports primarily. I am not a fan of Case Shiller and you never see me posting that material.
Unfortunately, streeteasy's ASKING price median tallies are the best available for a daily snapshot of the NYC market. With all the inherent flaws,duplicate listings, missing square footage, particularly on coops which let's face it are the lower half of the equation which would bring the average even lower)the field is still 12,000 entries making the median quite close to an accurate real average. You cannot ignore that or dismiss it as readily as you do.
THat the median ASKING average is $800 per sq ft off last year's $917 closing prices is significant. And I didn't start the conversation off of last years closing to today, but my responses to it were apropos.

But ultimately, im all about what Miller Sams Q3 will bare. But that info isn't until July. So make due with what we have.
And I'll take flawed median numbers over broker shil reporting or ever increasing failed in contract figures.

front_porch,

At the risk of personalizing my critique - which I don't mean to do as you strike me as a perfectly charming albeit statistically-challenged individual - I remain curious as to why it is, if Case Shiller NY Metro is wrong about Manhattan Coop valuations, that you ASSUME that Case Shiller errs on the low side???

You ASSERT (based upon personal experience) that Manhattan is doing BETTER than CSI NY indicates, but it strikes me that the available data would indicate that Manhattan is doing WORSE than the rest of the NY market (given the presence of so many high-end properties which aren't covered by conforming loans.)

To the best of my knowledge you live on the West Side of Manhattan. Go to the Miller Samuel web site (URL below) and look at the absorption rates for April 2010 on the West Side.

http://www.millersamuel.com/charts/gallery-view.php?ViewNode=1273082992tFAor&Record=3

Because of the collapse of the Jumbo Mortgage market most properties above $1.5M are stone cold. On the West Side every condo and coop for $2M has more than the historical level of inventory. Usually 8 months or lower is considered a "healthy" market, yet every $2M category is at BEST 10 months. The $10M Coops are at 5 YEARS of inventory!

The ENTIRE Las Vegas market, currently the worst hit RE market in the country, is currently estimated to have a 10 month supply - so every $2M category on Manhattan's West Side is WORSE than Vegas.

What's been selling are low-end property covered by conforming mortgages and to a lesser extent the tax break - but the tax break is gone.

You refer to the "strength" of the Manhattan market, but your odds of selling off all that inventory are better in Vegas...

CSI NY (Non-Seasonally Adjusted) Since April 2004 (Note that there is a lag in the release of data, so the data released this morning is for APRIL 2010, not May.)

April 2004 168.30
May 2004 170.52
June 2004 172.90
July 2004 175.74
August 2004 177.93
September 2004 179.79
October 2004 181.90
November 2004 183.69
December 2004 185.16
January 2005 187.19
February 2005 189.29
March 2005 192.17
April 2005 194.10
May 2005 195.96
June 2005 197.77
July 2005 199.86
August 2005 202.33
September 2005 204.83
October 2005 207.64
November 2005 210.30
December 2005 212.68
January 2006 213.50
February 2006 214.47
March 2006 214.33
April 2006 214.97
May 2006 215.57
June 2006 215.83
July 2006 215.25
August 2006 214.34
September 2006 214.09
October 2006 214.29
November 2006 214.24
December 2006 213.79
January 2007 212.78
February 2007 212.52
March 2007 212.40
April 2007 211.62
May 2007 210.51
June 2007 209.49
July 2007 208.37
August 2007 207.18
September 2007 206.39
October 2007 205.54
November 2007 204.38
December 2007 202.09
January 2008 200.44
February 2008 198.31
March 2008 196.52
April 2008 194.72
May 2008 194.23
June 2008 194.74
July 2008 193.70
August 2008 193.48
September 2008 191.66
October 2008 189.66
November 2008 186.52
December 2008 183.45
January 2009 180.93
February 2009 177.84
March 2009 173.60
April 2009 170.69
May 2009 171.17
June 2009 172.37
July 2009 174.07
August 2009 175.26
September 2009 174.92
October 2009 174.43
November 2009 172.68
December 2009 171.89
January 2010 171.42
February 2010 170.59
March 2010 169.38
April 2010 168.95

A few comments on the latest data.

NY Metro is now down in both the Seasonally Adjusted and Non-Seasonally Adjusted data for 8 straight months.

Nationally, CSI actually went up in April. NY Metro continued to go down. NY peaked later than most markets. It looks like other markets that peaked earlier are bouncing along the bottom, but even the expiration of the tax credit can't seem to change the direction of the NY Metro market.

Oh and to all those folks who insist that CSI is irrelevant to Manhattan because Manhattan is magic and somehow manages to go in the opposite direction pricewise than the rest the NY Metro - good luck with that!

hey, down only 1% year over year? if renting wasn't cheaper than buying these numbers would be hard to swallow for those on the sidelines. fortunately still it's a much better deal to rent than to buy though, carrying costs are too high (many times, they are more than half of my rent) and will keep on going higher imho.

Today's Case Schiller stats are distorted due to the housing tax credits. I would tend to discount the increases as due to government distortions of the housing market.

i'm kind of anxious to see how prices react to higher mortgage rates, but it looks like we will have to wait (maybe even a couple of years) to see that. it'll have to be a big blow though, as rents will not go higher imho without job creation and stagnant wages.

the public sector had just started cutting wages and firing in ny and nyc. wonder what effect that move has over rents.

For April 2010:

"Home Prices Rose Sharply in Final Days of Tax Credit"

"Single-family home prices unexpectedly climbed in April from March, driven by a final sales push before tax credits expired, but signs of a sustained recovery have yet to emerge ()"

"The S&P composite index of home prices in 20 metropolitan areas for April rose 0.4 percent on a seasonally adjusted basis after a downwardly revised 0.2 percent drop in March"

"On an unadjusted basis, prices gained 0.8 percent in April following March's 0.5 percent drop."

The 20-city index rose 3.8 percent in April from a year earlier ()"

"Other reports have shown sales of new homes sank by a record 32.7 percent in May to the lowest level since record keeping began in the early 1960s, and existing home sales unexpectedly fell 2.2 percent in May.

Applications to buy homes hover at 13-year lows."

http://www.cnbc.com/id/37993377

Also, note that the CSI NY Metro data shown above puts us back to April 2004 prices.

CSI NY Metro NSA went up to 170.45 for May 2010.

For May 2010, we're back up to April 2009 pricing. I think it would be a good bet that June 2010 CSI will go up as well, after that, all bets are off.

January 2009 180.93
February 2009 177.84
March 2009 173.60
April 2009 170.69
May 2009 171.17
June 2009 172.37
July 2009 174.07
August 2009 175.26
September 2009 174.92
October 2009 174.43
November 2009 172.68
December 2009 171.89
January 2010 171.42
February 2010 170.59
March 2010 169.37
April 2010 169.07
May 2010 170.45

Yes, numbers were good. In most areas of the country foreclosure inventory will limit further gains and maybe see a slight reverse. Manhattan does not have the foreclusure inventory so we may continue to do ok.

"May home prices gain but no sustained recovery"

"The 20-city composite price index rose 0.5 percent on a seasonally adjusted basis in May after an upwardly revised 0.6 percent gain in April, topping the 0.2 percent rise forecast in a Reuters poll.

Prices on an unadjusted basis jumped 1.3 percent in May, after a 0.9 percent April gain and declines in the six prior months. The index increased 4.6 percent in May from a year earlier, S&P said.

"While May's report on its own looks somewhat positive, a broader look at home price levels over the past year still does not indicate that the housing market is in any form of sustained recovery," David M. Blitzer, chairman of the Index Committee at Standard & Poor's, said in a statement."

http://www.reuters.com/article/idUSTRE65M2WK20100727

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pulaski,

I think you're on the right track with your postings but I'll quibble anyway.

While I'm not overly optomistic about price trends in the NYC Metro after the expiration of the tax credit, the effects of which we won't see until 3rd Quarter closings, I do think you have to acknowledge that the tax credit has helped revive what had been a moribund RE Market. According to CSI, the NYC market has been more or less flat for the last year after having been in freefall.

Your original post stated that the tax credit didn't lift the market, and your latest post states there is no "sustained" recovery. Since you cite the word sustained, I think it fair to say the freefall (before the tax credit*) would almost certainly have been self-sustaining - more underwater homeowners, more foreclosures, more unemployment, more bank failures, et cetera. RE prices may start falling again both nationally and in NYC, but it has given banks and individuals time to repair their balance sheets so the jury is still out whether RE goes into freefall again - especially with interest rates low for the moment.

Long term, the RE market depends upon a lot of other factors that I'm not capable of predicting...

*NB: I have MAJOR problems with the housing tax credit, but it did help pull the RE market out of a freefall - a freefall that would have certainly fed upon itself.

"Case-Shiller: June Home Prices Rise 4.2%, But Beware The Tax Credit"

"A 4.2% gain in June (and 4.4% gain in Q2) is better than expected, but as S&P is noting, there's likely a major impact from the tax credit, which has since expired."

New York MSA:
2010 Q2 from 2010 Q1 2010 Q1 from 2009 Q4
1.3% from 0.7% 0.9% from 0.7%

http://www.businessinsider.com/june-case-shiller-2010-8

Buy now or be priced out forever!

Forget Case Shiller....Question of the month or end of month will be...Does the average price per square ft on the upcoming 3rd quarter Miller Sams report crack below $1000 per sq ft.
I would think not but the recent flood of FIdi new development closings in the 800/900 per sq ft range may bring it down.
It's gonna be close.

truthskr10 -- which buildings are you referring to? [side question -- personally I think hi-rise wmburg with views in that price range, especially with balconies, is way nicer than fidi, and not much different in transport access, more fun hood.......but wonder what others think]

Well let's see, there's...

20Pine 362 recorded sales: $858 per ft² (avg)
99 John 136 recorded sales: $887 per ft² (avg
111 Fulton 147 recorded sales: $848 per ft² (avg

Note: Sales totals are taken from the buildings SE page and is a total since sales opened for the building, not for the quarter, but the totals avg price let's you know units in the building are going near those numbers now.

I hate Fidi but Williamsburg? Really? I mean maybe the Edge but still.

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For July 2010: "Case-Shiller: "Home Prices Stable in July" "

"( ) the annual growth rates in 16 of the 20 MSAs and the 10- and 20-City Composites slowed in July compared to June 2010. The 10-City Composite is up 4.1% and the 20-City Composite is up 3.2% from where they were in July 2009. For June they were reported as 5.0% and 4.2%, respectively. Although home prices increased in most markets in July versus June, 15 MSAs and both Composites saw these monthly rates moderate in July."

"Prices probably declined just about everywhere in July, but this will not be evident in the Case-Shiller index until next month since the Case-Shiller index is an average of three months."

http://www.calculatedriskblog.com/2010/09/case-shiller-home-prices-stable-in-july.html

For August 2010: "Case-Shiller: Home Price declines widespread in August"

"The Composite 10 index is off 29.2% from the peak, and down 0.2% in August(SA).

The Composite 20 index is off 28.8% from the peak, and down 0.3% in August (SA)."

"Prices increased (SA) in only 1 of the 20 Case-Shiller cities in August seasonally adjusted. Only New York saw a price increase (SA) in August, and that was very small."

"Prices are now falling - and falling just about everywhere. And it appears there are more price declines coming (based on inventory of anecdotal reports).

http://www.calculatedriskblog.com/2010/10/case-shiller-home-prices-declines.html

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NYC was up!

pulaski,

Thanks for posting!

As for NY Metro CSI, the actual NSA data for the last few months follows:

April 2010 168.90
May 2010 170.48
June 2010 172.85
July 2010 174.98
August 2010 175.27

(If you compare previous numbers in this thread, you will note minor changes in the data. CSI makes backward revisions.)

While the NY metro CSI index will probably start to decline when they release the September data in a month, given 4 straight months of increases, I think the market stands a reasonable chance of being flat for the year...

For September 2010: "Case-Shiller: Broad-based Declines in Home Prices in Q3"

"Case-Shiller Home Price Indices ... show that the U.S. National Home Price Index declined 2.0% in the third quarter of 2010, after having risen 4.7% in the second quarter. Nationally, home prices are 1.5% below their year-earlier levels. "

"Prices increased (SA) in only 1 of the 20 Case-Shiller cities in September seasonally adjusted. Only Wash, D.C. saw a price increase (SA) in September, and that was very small.

Prices in Las Vegas are off 57.6% from the peak, and prices in Dallas only off 8.1% from the peak.

http://www.calculatedriskblog.com/2010/11/case-shiller-broad-based-declines-in.html

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Outlook from Core Logic:

"CoreLogic: House Prices declined 1.9% in October"

“We are continuing to see the weakness in home prices without artificial government support in the form of tax credits. The stubborn unemployment levels and seasonality are also coming into play,” said Mark Fleming, chief economist for CoreLogic. “When you combine these factors with high shadow and visible inventories, the prospect for a housing recovery in early 2011 is fading.”

"The index is down 3.93% over the last year, and off 30.2% from the peak."

http://www.calculatedriskblog.com/2010/12/corelogic-house-prices-declined-19-in.html

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For October

"Home Prices Weaken Further as Six Cities Make New Lows"

"Data () show a deceleration in the annual growth rates in 18 of the 20 MSAs and the 10- and 20-City Composites in October compared to what was reported for September 2010. The 10-City Composite was up only 0.2% and the 20-City Composite fell 0.8% from their levels in October 2009. Home prices decreased in all 20 MSAs and both Composites in October from their September levels. In October, only the 10-City Composite and four MSAs %u2013 Los Angeles, San Diego, San Francisco and Washington DC %u2013 showed year-over-year gains."

"Prices are now falling - and falling just about everywhere. As S&P noted "six markets %u2013 Atlanta, Charlotte, Miami, Portland (OR), Seattle and Tampa %u2013 hit their lowest levels since home prices started to fall in 2006 and 2007". More cities will join them soon."

http://www.calculatedriskblog.com/2010/12/case-shiller-home-prices-weaken-further.html

"Metro" New York was down 1.6% from September to October and down 1.7% year-over-year October.

Yes, it is "metro," but it does give some insight as to what is happening in the region...which does influence Manhattan.

A lot of smart people are expecting a double-dip, albeit one which is smaller than the first plunge. Prices seem to be rolling over again. And volume is down sharply.

http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldocumentfile&blobtable=SPComSecureDocument&blobheadervalue2=inline; filename=download.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application/pdf&blobkey=id&blobheadername1=content-type&blobwhere=1245281640766&blobheadervalue3=abinary; charset=UTF-8&blobnocache=true

Topper,
Are the New York numbers seasonally adjusted? Looks to me like normal seasonal variation(i.e. FLAT)

I'm guessing that the numbers are not seasonally adjusted as there doesn't seem to be any mention of that. I wouldn't think that would be a big deal for October while it could be a big deal for December / January. But that's just my amateur thinking. (I got tired trying to wade through the site.)

Usually the first analysis is more head-line grabbing and then 24 hours later you start seeing the reporting that puts this all in context. I'm holding off on the "sell now or be long now forever" speech.

Case-shiller reports numbers that are not seasonally adjusted (-1.6% for October) in the press release, but if you go on to the charts, both are reported. The adjusted number for NY is -1.5%, not that different.

"ROBERT SHILLER: If House Prices Keep Falling This Fast, The Economy Is Screwed"

"Housing guru Robert Shiller says the decline in October's Case-Shiller house-price index was much worse than expected (over 10% annualized). 

He also says that if house prices keep falling this fast, the economy will face "serious reasons to worry" (which, for Professor Shiller, is an apocalyptic statement)."

http://www.businessinsider.com/robert-shiller-if-house-prices-keep-falling-this-fast-the-economy-is-screwed-2010-12

"CoreLogic: House Prices declined 1.6% in November"

"CoreLogic ... released its November Home Price Index (HPI) which shows that home prices in the U.S. declined for the fourth month in a row. "

"The index is down 5.07% over the last year, and off 30.9% from the peak.

The index is only 1.2% above the low set in March 2009, and I expect to see a new post-bubble low for this index - possibly as early as next month or maybe in early 2011. "

http://www.calculatedriskblog.com/2011/01/corelogic-house-prices-declined-16-in.html

"Case-Shiller: U.S. Home Prices Keep Weakening as Eight Cities Reach New Lows in November"

"Data through November 2010, ( ) show a deceleration in the annual growth rates in 17 of the 20 MSAs and the 10- and 20-City Composites compared to what was reported for October 2010. The 10-City Composite was down 0.4% and the 20-City Composite fell 1.6% from their November 2009 levels. Home prices fell in 19 of 20 MSAs and both Composites in November from their October levels. In November, only four MSAs – Los Angeles, San Diego, San Francisco and Washington DC – showed year-over-year gains. The Composite indices remain above their spring 2009 lows; however, eight markets – Atlanta, Charlotte, Detroit, Las Vegas, Miami, Portland (OR), Seattle and Tampa – hit their lowest levels since home prices peaked in 2006 and 2007, meaning that average home prices in those markets have fallen even further than the lows set in the spring of 2009."

http://www.calculatedriskblog.com/2011/01/case-shiller-us-home-prices-keep.html

The CEO of Predential Douglas Elliman was quoted as saying, we'll be lucky if we go sideways this year.

That's pretty respectable for a broker.

Ignored comment. Unhide

"House Prices and Months-of-Supply, and Real House Prices"

"A few key points:

• The real price indexes are at post-bubble lows. Those who argued prices bottomed some time ago are already wrong in real terms, and will probably be wrong in nominal terms soon.

• Don't expect real prices to fall to '98 levels. In many areas - if the population is increasing - house prices increase slightly faster than inflation over time, so there is an upward slope in real prices.

• Real prices are still too high, but they are much closer to the eventual bottom than the top in 2005. This isn't like in 2005 when prices were way out of the normal range.

• Prices will probably fall some more and my forecast is for a decline of 5% to 10% from the October 2010 levels for the national price indexes. We will need to watch inventory (and months-of-supply) closely over the next few months to forecast house prices."

http://www.calculatedriskblog.com/2011/01/house-prices-and-months-of-supply-and.html

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Ignored comment. Unhide

Look at the Streeteasy condo index for December! 6.08% against last year, 1.19% against November. What happened to our double dip? Prices up, volume down.

"CoreLogic: House Prices declined 1.8% in December"

"The index is down 5.46% over the last year, and off 31.6% from the peak.

This is the fifth straight month of year-over-year declines, and the sixth straight month of month-to-month declines. The index is only 0.07% above the low set in March 2009 (essentially at the low), and I expect to see a new post-bubble low for this index with the January release. "

http://www.calculatedriskblog.com/2011/02/corelogic-house-prices-declined-18-in.html

Isn't nads a condo index guy?

Inonada - is there a data integrity issue with the SE index?

"Case Shiller Confirms Housing Double Dip Accelerated, 20-City Composite At Lowest Since June 2009"

"As of December, so almost three months ago, the housing double dip was getting increasingly worse. This was confirmed by the latest Case Shiller data, according to which the 10- and 20-City Composites posted annual rates of decline of 1.2% and 2.4%, respectively."

“The 10- and 20-City Composite indices remain above their spring 2009 lows; however, 11 markets – Atlanta, Charlotte, Chicago, Detroit, Las Vegas, Miami, New York, Phoenix, Portland (OR), Seattle and Tampa – hit their lowest levels since home prices peaked in 2006 and 2007. We have seen more markets hit new lows in each of the past three months.”

http://www.zerohedge.com/article/case-shiller-confirms-housing-double-dip-accelerated-20-city-composite-lowest-june-2009

Buy low, sell lower...

And this is with all-time low mortgage rates - wonder what's going to happen when rates hit 7-9%???

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speaking of data integrity issues . . .

WSJ

Home Sales Data Doubted
Realtor Group May Have Overstated Number of Existing Houses Sold Since 2007
By NICK TIMIRAOS

The housing crash may have been more severe than initial estimates have shown.

The National Association of Realtors, which produces a widely watched monthly estimate of sales of previously owned homes, is examining the possibility that it over-counted U.S. home sales dating back as far as 2007.

The data, used by economists, investors and the real-estate industry, could be revised downward this summer.

The group reported that there were 4.9 million sales of previously owned homes in 2010, down 5.7% from 5.2 million in 2009. But CoreLogic, a real-estate analytics firm based in Santa Ana, Calif., counted just 3.3 million homes sales last year, a drop of 10.8% from 3.7 million in 2009. CoreLogic says NAR could have overstated home sales by as much as 20%.

While revisions wouldn't affect reported home-price numbers, they could show that the housing market faces a bigger overhang in inventory, given the weaker demand.

In December, NAR said that it would take 8.1 months to sell some 3.6 million homes listed for sale at the current pace, but the number of months it would take could be even higher if sales are revised down. Any revisions wouldn't have an impact on homeowners, but it could have consequences for the real-estate industry. Downward revisions would show that "this horrific downturn in the housing market has been even more pronounced than what people thought, and people already thought it was pretty bad," said Thomas Lawler, an independent housing economist.

NAR said the data, which are used by economists, investors and the real-estate industry to gauge the health of the housing market, could be revised downward this summer. Lawrence Yun, chief economist at NAR, wasn't specific about whether and by how much the revisions could reduce reported sales, and he raised the possibility that the CoreLogic estimates have understated the number of home sales. "This is a very important issue, and we are looking at it carefully right now," Mr. Yun said.

Economists say any overstatement is the result of difficulty tracking data during market corrections. "This is an economic data issue, not a gaming-the-numbers issue," said Sam Khater, senior economist at CoreLogic. "Any time you get big shifts in the market, the numbers go haywire for a bit."

Over the past decade, a growing number of housing-research firms have sprouted up, offering new ways to track home sales.

CoreLogic, which was spun off from First American Financial Corp. last year, measures sales by tracking property records through local courthouses. The firm says its data covers approximately 85% of all home sales tracked by NAR.

NAR, which is due to report January home sales on Wednesday, uses a sample of sales data reported by local multiple-listing services to calculate monthly changes in sales.

To produce estimates of annual sales, it uses a model that is benchmarked to the figures reported in the decennial U.S. Census. The model requires making certain assumptions for population growth and other measures in between the census surveys.

Those models could have over-counted sales due to recent consolidation among multiple-listing services, which has resulted in those firms having wider coverage of housing markets. NAR's tally could be distorted if the firms "are sending us more home sales because they have a larger coverage area, but without informing us" that their reach has grown, said Mr. Yun.

Because not every home sale goes through a multiple-listing service, NAR must also make additional assumptions. For example, it must estimate what share of transactions are "for-sale by owner," and the housing downturn has sharply reduced that segment of the market. Consequently, the NAR could over-estimate sales if it hasn't properly adjusted for a smaller "for-sale by owner" share, said Mr. Yun.

NAR typically produces revisions of home-sales data at the end of every decade based on the latest Census survey data. But because the 2010 Census didn't ask U.S. residents about home sales, NAR must devise a new way to build its home-sales model.

Several economists approached NAR late last year with questions about its modeling. NAR economists promised to study the issue during a December conference call that included economists from the Mortgage Bankers Association, Fannie Mae, Freddie Mac, the Federal Reserve, the Federal Housing Finance Agency and CoreLogic.

Economists from the Mortgage Bankers Association said they became skeptical after the MBA's index of mortgage-purchase applications appeared to be a less reliable indicator of home sales. The index had been closely correlated to NAR existing home-sales data until 2007. Even assuming a high share of all-cash sales, purchase-loan application data suggests that home sales have been overstated by 10% to 15%, said Jay Brinkmann, the MBA's chief economist.

"If they are off by this much, this consistently, it would be sending the wrong signal to the market," said Mr. Brinkmann.

Downward revisions in existing home sales could have an impact on real-estate related businesses, but economists said it isn't clear that they would have a meaningful impact on the broader economy, which typically relies more heavily on new-home construction to drive growth.

"Inonada - is there a data integrity issue with the SE index?"

I missed this earlier, spinny. You won't find any argument from me here: all signs point to being up around 5-6% from the mid-late 2009 lows.

However, between the 3% required to counteract negative carry and the 1% interest rate difference between when you bought and these late 2010 purchases, I think these late 2010 purchases are sitting much prettier. The value of that 1% interest rate difference is on the order about $100K on a $1M place. It's not like people who bought in 2009 exactly refinanced in 2010. And that's not even getting into what could have been done with the risk capital over the past couple of years.

Think about it: inflation plodded on by 2%, the cost of money dropped by 20%, every other risk asset went up by 50-100%, and this market went up 5-6%. Pretty shabby...

"Home Prices Slid in December in Most U.S. Cities"

"Mr. Shiller, noting the unrest in the Middle East, a large backlog of foreclosed houses, the uncertain future of the mortgage holding companies Fannie Mae and Freddie Mac and proposals to reduce the mortgage tax deduction, saw “a substantial risk” of declines of “15 percent, 20 percent, 25 percent.” "

http://www.nytimes.com/2011/02/23/business/economy/23housing.html?_r=1

We're doomed, DOOOOOOOMED, I tells ya!*

*Except for prime Manhattan, Park Slope, Williamsburg and LIC. There, it's Party On as normal!

what does the Middle East have to do with the US housing market? Are houses made from oil or something like that?

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going lower......

"U.S. Home Values Have Fallen Past The Housing Crash -- Back To 2003 Levels"

"Home values in 25 major cities have fallen to the lowest level in eight years, according to the RPX Composite Index.

That's a definitive double dip.

And from peak, home values are down 34%."

"Housing Wire describes a "nameless, formless crisis" enveloping the housing market."

http://www.businessinsider.com/rpx-home-values-lowest-2003-2011-3

"CoreLogic: House Prices declined 2.5% in January, Prices at New Post-bubble low"

"CoreLogic ... January Home Price Index (HPI) which shows that home prices in the U.S. declined for the sixth month in a row. According to the CoreLogic HPI, national home prices, including distressed sales, declined by 5.7 percent in January 2011 compared to January 2010 after declining by 4.7 percent in December 2010 compared to December 2009. Excluding distressed sales, year-over-year prices declined by 1.6 percent in January 2011 compared to January 2010 and by 3.2 percent in December 2010 compared to December 2009."

"The index is down 5.7% over the last year, and off 32.8% from the peak.

This is the sixth straight month of year-over-year declines, and the seventh straight month of month-to-month declines. The index is now 1.6% below the previous post-bubble low set in March 2009, and I expect to see further new post-bubble lows for this index over the next few months. "

http://www.calculatedriskblog.com/2011/03/corelogic-house-prices-declined-25-in.html

> what does the Middle East have to do with the US housing market? Are houses made from oil or something like that?

what does public pensions have to do with oil? it's not as if taxpayer's ability to pay is related to ability to commute to work... or wait!

Ignored comment. Unhide

I've read (on CNN, so not too much credibility) that for every $10 increase in the price of a barrel of oil, the US economy gives back .1% of growth. So if the price goes from $70 to $120 a barrel, that's .5% of GDP growth evaporated.

"Case Shiller: Home Prices Off to a Dismal Start in 2011"

"Home Price Indices ... show further deceleration in the annual growth rates in 13 of the 20 MSAs and the 10- and 20-City Composites compared to the December 2010 report. The 10-City Composite was down 2.0% and the 20-City Composite fell 3.1% from their January 2010 levels. "

"Both composite indices are still slightly above the post-bubble low (SA), but the indexes will probably be at new lows in early 2011."

http://www.calculatedriskblog.com/2011/03/case-shiller-home-prices-off-to-dismal.html

For Calculated Risk to call something "Dismal" is significant. They are not into hyperbole.

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