Housing: It’s Back in Trouble

How long have I been telling you?  About five years now?  This was when we looked at the 2008 housing rubble collapse and figured that there hasn’t been enough widespread pain yet to really let the air out of the bubble.  The Fed just put a little tape on the balloon, congress jaw-flapped and everyone cried “It’s solved!” 

Which is a crock, as the new Housing report from Case Shiller/S&P/Dow Jones out this morning is beginning to show:

New York, September 30, 2014 – Data through July 2014, released today by S&P Dow Jones Indices for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show a significant slowdown in price increases. Nineteen of the 20 cities saw lower annual returns in July. Las Vegas, Miami and San Francisco were the only cities to report double-digit annual gains. Cleveland’s rate remained unchanged at +0.9% for the 12 months ending July 2014.
In July, the 10-City and 20-City Composites increased 0.6% and the National Index 0.5%. Although all cities but one gained on a monthly basis, 17 saw smaller increases in July as compared to last month. Although New York saw a lower gain this month, it was the only city where prices rose over one percent. San Francisco posted its largest decline of 0.4% since February 2012.

“The broad-based deceleration in home prices continued in the most recent data,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “However, home prices continue to rise at two to three times the rate of inflation. The slower pace of home price appreciation is consistent with most of the other housing data on housing starts and home sales. The rise in August new home sales — which are not covered by the S&P/Case-Shiller indices – is a welcome exception to recent trends.

“The 10- and 20-City Composites gained 6.7% annually with prices nationally rising at a slower pace of 5.6%. Las Vegas, one of the most depressed housing markets in the recession, is still leading the cities with 12.8% year-over-year. Phoenix, the first city to see double-digit gains back in 2012, posted its lowest annual return of 5.7% since February 2012.

“While the year-over-year figures are trending downward, home prices are still rising month-to-month although at a slower rate than what we are used to seeing over the past couple of years. The National Index rose 0.5%, its seventh consecutive increase. At the bottom was San Francisco with its first decline this year and the only city in the red. New York tended to underperform over the past few years but it was on top for the last two months.”

So not only are housing prices stuck at late 2004 levels as shown in the chart above, the data is not adjusted for inflation and it doesn’t take the buy-sell commission bite into account, either.

And yes, I’m sure that Bob Prechter over at Elliott Wave will explain how this is classic Elliott in the social sphere…

Which is one of the reasons we elected not to sell our lil place in the woods just yet.  We figured to wait until the crap is REALLY hitting the fan and than go Urban Pioneering on the tail end of chaos…which is still some distance ahead.  But that’s when a self-sufficient survival platform seems it  will have likely have the highest value relative to in-city housing…

There….feel better?