Good News on Housing – Or IS it?

Let’s roll with the data in the Case-Shiller Housing data just out:

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 4.4% annual gain in March, up from 4.2% in the previous month. The 10-City Composite annual increase came in at 3.4%, up from 3.0% in the previous month. The 20-City Composite posted a 3.9% year-over-year gain, up from 3.5% in the previous month.
Phoenix, Seattle and Charlotte reported the highest year-over-year gains among the 19 cities (excluding Detroit for the month). In March, Phoenix led the way with an 8.2% year-over-year price increase, followed by Seattle with a 6.9% increase and Charlotte with a 5.8% increase. Seventeen of the 19 cities reported higher price increases in the year ending March 2020 versus the year ending February 2020.  

The National Index posted a 0.8% month-over-month increase, while the 10-City and 20-City Composites posted increases of 1.0% and 1.1% respectively before seasonal adjustment in March. After seasonal adjustment, the National Index and the 20-City Composite posted a month-over-month increase of 0.5%, while the 10-City Composite a posted 0.4% increase. In March, all 19 cities (excluding Detroit) reported increases before seasonal adjustment as well as after seasonal adjustment.
“March’s data witnessed the first impact of the COVID-19 pandemic on the S&P CoreLogic Case-Shiller Indices,” says Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P Dow Jones Indices. “We have data from only 19 cities this month, since transactions records for Wayne County, Michigan (in the Detroit metropolitan area) were unavailable.
“That said, housing prices continue to be remarkably stable. The National Composite Index rose by 4.4% in March 2020, with comparable growth in the 10- and 20-City Composites (up 3.4% and 3.9%, respectively). In all three cases, March’s year-over-year gains were ahead of February’s, continuing a trend of gently accelerating home prices that began last autumn. March results were broad-based. Prices rose in each of the 19 cities for which we have reported data, and price increases accelerated in 17 cities. “

It’s good – means people are still confident about the future.  But, we fear it also has a lot to do with how much “easy money” the Fed has been printing up.  Driving prices higher, again higher.

We would emphasize several points with this report.

  • It’s old data – MARCH.
  • There’s a virus angle to it as a technical note says: “Please note, due to deed availability delays at the local recording office caused by the COVID-19 crisis, sale transaction records for March 2020 for Wayne County, MI have not been accounted for. Since Wayne is the most populous county in the Detroit metro area, S&P Dow Jones Indices and CoreLogic are unable to generate a valid March 2020 update of the Detroit S&P CoreLogic CaseShiller indices for the May release. “
  • The prices are not inflation-adjusted.
  • And this is prices only – remember in real estate there’s always a commission spread around somewhere.

Not that any of this matters,  as stock futures after the days were up 575 on the Dow.

The rest of this morning’s report is here.


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George Ure
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23 thoughts on “Good News on Housing – Or IS it?”

  1. I would love to see that whole report next week in Australia..
    My fear is that the numbers will be juggled around to promote social interaction.. we all know that numbers can be flipped to show whatever end game they seek. Salesmen use this all the time to promote sales.
    The old childs math of three guys giving ten dollars to equal thirty then give each one back a dollar pocket two three times nine is twenty seven add two gives you twenty nine one is missing..where in reality thirty minus five is twenty five etc. The same numbers can be used either way to make a situation look better than or worse than.

  2. March closings were sales contracts inked in January and February. Too soon to see the Covid effect.

  3. This is from my companies Western Region President on the real estate activity this past week. I can attest to the robustness of the market. From March 15 to this past weekend, my team was actually up YOY …not much…only 01%, but while most agents took a loss, we remained steady despite our strict SIP rules. But…California is self sustaining, and a huge exporter and not dependent on other states, so what Money happens here stays here. Here is his ‘report”

    “This was likely the craziest busy weekend of real estate I can remember [established 2006]. Buyer demand is furious and coming to your community from every vantage point. Buyers seem to be:
    * Fleeing rentals, trading up, seeking yards, pools and solitude.
    * Seeking quality schools, sense of smaller communities, resort-like properties and pools [again].
    * The migration from urban areas:
    * Los Angeles to beach communities on west-side and Santa Barbara.
    * San Francisco to East Bay, Marin, Wine Country and Silicon Valley communities with amazing school districts.
    * Anything “move-in ready” under $2 million is seeing multiple offers.
    * The high-end is seeing multiple offers at $3M, $5M and +$10M throughout CA. Not so much at “list price” but we predicted this softness.
    * The activity in the City of San Francisco over $5M seems to be move up buyers. If you love San Francisco get a better home and love San Francisco more.
    * In Beverley Hills & Brentwood it seems to be the same “love it more” over $5M.
    * The Entertainment and production industries are negotiating with Unions to get back to work. This could unleash another wave of buyers.
    * Births, engagements, divorce, death and downsizing are all happening as well.
    * The demand is ferocious in every aspect of the business. It seems every real estate season and every buyer demand all on a weekend.
    * In our second home markets, the conversations have gone from “I’d love to rent a high-end home” and check the area out to “I need a home / buying a home” for the quality of my life. This is where I want to live!”

    • ” I can attest to the robustness of the market.”

      And all along a stock with a symbol “MARK” went from 40 cents in April to three dollars as of May 26. See how it all works out well? ;)

      • Dave,
        What we deserve…just like anyone else. The United States doesn’t exist without California. We are the engine that runs this country.

    • Mark is on the mark. I own and manage rental properties in the Santa Barbara area
      and I am amazed at the strong influx of out-of-the-area applicants.

    • Really dude? Cali runs the country? Maybe in fantasy movies and the debilitating movements by the Hollywood demons to demoralize our country and change everyone from boys to girls and other perverse gender horrors.
      But in reality, California could slip off the map, and we would only notice the massive reruns on TV with no more trashy programming to attempt to brainwash the masses some more. Other than mental garbage what is the product or products coming out of Cali that we just could not do without? Oil? Food? I do like almonds and avocados, but I like Florida oranges too.
      So please, enlighten me and back up the statement that “California is the engine that runs the country”, cuz I disagree other than to alter the statement to: “California is the engine that runs the country, into the ground!” Blessings

    • Jeez Mark, not all the country is snatching million dollar homes like hotcakes:

      4 million (or 7%) are now in forbearance (haven’t paid their mortgage), was only 150k a month ago), and will keep climbing due to the unemployment rate (and there’s no guarantee that a new loan or missed payments will be forgiven):

      Real Estate prices also expected to drop:

  4. In Western Wayne County (Michigan) new subdivisions are still being dropped in, large subdivisions set on 1 mile by 1 mile squares.

    Generally, new houses start at $350,000 with the small lot and quickly move up in price. There’s nothing special about these houses. Old corn fields that are being planted with houses. No big trees or rivers or ponds/lakes. Just sprawl.

    Used houses are flying off the shelves. I see for sale signs and within a month the “SOLD” sticker is on the place.

  5. Anybody have an opinion as to why it’s business as usual and we seem to have skipped a hurdle and not had any setbacks other than no place to go eat, drink, and hang out? I am perplexed as to how we aren’t seeing home sales tank and people jumping out of the window cuz they lost a home or a bunch of money.
    This place looks more and more like a sci-fi flick everyday. I’m at a loss when I hear how much some people hate the president so much while he works everyday to advocate for them. These people love the traitors and sell outs. WTF is wrong with everybody? Was there something in the water I managed to filter out with my massive water filtration system after my well? Not that the well water is bad, but iron and manganese as well a little arsenic to sweeten the pot. I use a triplex incoming for sediment and metals. But for drinking and potable use, only an RO system will do. Of course re-integrating minerals at the final run. It’s basically sweet water.
    But I digress. We are in the midst of a massive brainwashing that has been going on for several decades. Probably since the 60’s. People are being prepared for slavery/socialism. I’m a dinosaur. A small business tradesman with a family orientation built by a husband and wife team with their sons in the field. That almost doesn’t exist in NJ. All the little mom and pops are being bought up by the big guys. One man bands are all that will be left in a few years. If we make that. What are we heading into? Not pretty. Blessings

    • for myself.. I am trying to pretend that what is coming isn’t…the old stick your head in the sand and ignore it..
      I am betting the rest are trying to do the same to..

      • I would love to to do that but it doesn’t work. While me head is in the sand, I keep getting kicked in the arse by everyone and everything. So I find I am better off with my head up and my ass covered.
        But it’s tempting my friend. Round and round we goes, where we end up, nobody knows. I like your posts and find many of the fine folks here refreshing. Blessings

      • “Round and round we goes, where we end up, nobody knows.”

        Steve…. I am thinking down the drain of despair lol.. I’ve been in the death spiral a couple of times.. it sucks..
        Pretend it’s not there and hope to god every everyone else is to..
        I did notice that the oil companies decided to raise the cost of gas the very next day after the president said everyone it’s time to go back to life normal. Even though theres still half of the population is out of work and the velocity of still stalled..
        Theres nothing like slapping those that are already burdened.. two months not being able to make their monthly Bill’s behind on all their payments and rent.. then wham while their bent over slap a little tube without lube..

  6. so much enthusiasm and woopee around !!! so good .. the great America and the stars and stripes are back .. makes Nazi germany from hitler days look like Mormons or jehova .. America 2020 the real deal .. psycopathic fools all the way from wall and broad to Pennsylvania avenue .. you wanna hear a real good one !!! capitalists!! even better, globalists !! and darn hot dog even better humane !!! romes on fire baby !! let it burn 25178

  7. and yah hear the one about inflation !!! with a global oil glut and record low interest rates .. what a bunch of storytellers USSA .. yeeehhhhaaaaa ride em cowboy

  8. Have a good day Mister. I been up since one am.

    A crow was the first speak this morning. may have just been talking in sleep though. There is a little Owl sitting on a tree branch just staring at me in silence while I do my morning ritual with the maker and my 4 candles. No so much as even a little “who” out of him.

    Ahhhhh the finches are the first to sing. Today is a good day.

    Later dude. I got a whole plate of study to catch up on.

  9. The asset debt macroeconomic system is deterministic. The counterdeflationary responses of central banks at this point in the grand 230 year hegemonic US cycle are also deterministic. What would have been the composite commodity and equity asset valuation patterns and those nadir valuations in 2009 if the global central banks had not intervened and without acquisition of the ‘devalued toxic assets’ and initiation of global ‘QE’s’? In 2019, corporate bad debt toxic assets were necessarily supported by central bank intervention. The incidental virus exponentialzed the necessity for this intervention.What would commodity and equity composite valuations be sans the necessary reaction intervention of global central banks to unsustainable global corporate debt with the addition of the impact of the virus on service sector and entertainment jobs and revenue? These are real questions which involve the nadir low and debt driven high valuations and the cyclical patterns that represent the science of asset debt macroeconomics. Expect near term nonlinearity in asset and commodity prices regardless of central bank intervention.

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