Housing Levels Off

Just out from Case-Shiller/S&P/CoreLogic:

“NEW YORK, MAY 28, 2019 – S&P Dow Jones Indices today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for March 2019 shows that the rate of home price increases across the U.S. has continued to slow.”

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 3.7% annual gain in March, down from 3.9% in the previous month. The 10-City Composite annual increase came in at 2.3%, down from 2.5% in the previous month. The 20-City Composite posted a 2.7% year-over-year gain, down from 3.0% in the previous month.
Las Vegas, Phoenix and Tampa reported the highest year-over-year gains among the 20 cities. In March, Las Vegas led the way with an 8.2% year-over-year price increase, followed by Phoenix with a 6.1% increase, and Tampa with a 5.3% increase. Four of the 20 cities reported greater price increases in the year ending March 2019 versus the year ending February 2019.  “

Before seasonal adjustment, the National Index posted a month-over-month increase of 0.6% in March. The 10-City and 20-City Composites both reported 0.7% increases for the month. After seasonal adjustment, the National Index recorded a 0.3% month-over-month increase in March. The 10-City and 20-City Composites both posted 0.1% month-over-month increases. In March, 19 of 20 cities reported increases before seasonal adjustment, while 14 of 20 cities reported increases after seasonal adjustment.
“Home price gains continue to slow,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The patterns seen in the last year or more continue: year-over-year price gains in most cities are consistently shrinking. Double-digit annual gains have vanished. The largest annual gain was 8.2% in Las Vegas; one year ago, Seattle had a 13% gain. In this report, Seattle prices are up only 1.6%. The 20-City Composite dropped from 6.7% to 2.7% annual gains over the last year as well. “

We will offer the usual caveat on the above price data:  First, these are prices paid but remember that there are real estate deal costs on the way in and out, so factor 5% spread for those.

The other caveat is to be sure to consider the effects of inflation.  If you look at the money sup0ply numbers, you will see the Fed is printing about 2-3% mpore than last year so if you see real estate prices up this much, on a pujrchadsing-power basis, it may be a break-even.

After the data, Dow increases fell back to +18 on the futures side…

Oh, and if you remember our recent admonishments about a possible “double top” in the stock market as being a possibility, see what the peaks look like in the housing chart, too…  just saying…

OK, back to the garden… moron the ‘morrow…

8 thoughts on “Housing Levels Off”

  1. Whistle while you work. Whistle while you work. Its the Percolating the pot. inspiration within the garden of the mind. All Wealth is cultivated there.

    Whirling Dervishes forsure. Round and round we go. Like a grand game of duck! duck! goose! :) Or a cake walk, where you can have your cake and eat it too. The tempo is the navigational becon.

    Yes the Housing market has slowed but that doesnt mean its the end of the world. Just cause its the tower of Jenga. The pace of which the blocks are removed doesnt signal the end, only the rate of dynamics the escalation of anticipation.

    Love is in the air, you can feel it. Its spring time. Bee’ s be Bee’s and bird is the word.


    • It’s spring time and what percent of fields have been planted. How much is under water and what happens when food prices spike in the fall more than most years?

  2. Minimum prices reflect unavailable minimum down payments or means to negotiate. There are other signs. The SECURE Act allowing annuities derived from mature ETF’s to be rolled back into other ETF’s to squeeze the last drops of revenue from investors. How about Amazon squeezing mom and pop out of business to give greater market control to the big companies (who don’t sell counterfeit goods, LOL!). The root problem is we’re losing liquidity. We no longer live in a world of this AND that; it’s now this OR that, and the big ticket items are getting farther and farther out of reach… The next step is to squeeze the upper middle class a little harder to get foreclosures going again, giving the 1%-ers and China opportunities to buy up the rest of the good properties on the Monopoly board. I keep seeing an article on Marketwatch about how young people are foregoing 401(k)’s because there is no point. They don’t see a healthy earth in their future to invest in. If they don’t get on the wagon, the whole ride will fall apart and then what?

  3. Do you get a sensation from an emotion or do you get her number from a sensation

  4. To extend one’s love of life ,protect and partake of the moringa

  5. David Blitzer gets the Mr. Obvious Award.. Like the weather, Housing prices fluctuate constantly. They have to. If they were to consistently go up, we couldn’t afford to live here anymore…

    They have always gone through corrections and will continue to go through corrections. And that’s ok…Houses are the ultimate long term investment. Most homeowners could care less if the prices of homes in March went up or down…If they bought it 1-3 years ago…they don’t care because they will be in the home for an average of 7-10…and that’s usually only if they are first time home buyers. Second time home buyers seem to in their home until retirement in many cases…So they don’t care about fluctuations much.

    If they bought it 3-7 years ago and are first time home buyers…they really don’t care either…They may get a tiny bit less from the sale of their home if they plan on selling, but when you factor in the MOST conservative 3.5% annual gains in a 7 year period…a $500,000 home will still have increased in value over $122,000. Do you think they care much about what happened year over year in March?

    If they bought it 7-15 years ago, they have equity and if they live in a large market, substantial price gains…On the low end of value gain…3.5% times 15 years on a $500k home is a $260,000 equity gain. So a blip in price doesn’t concern them as much either. Like a long held Blue Chip stock, fluctuations in pricing doesn’t concern the long term investor.

    And those that bought their home 15-30 years ago…well let’s just say that they are sitting in a good position…with most, if not all of their mortgage paid off and a ton of increased equity from pricing gains. As an example…My next door neighbor who has a larger home than me, bought his home for $47,000 in 1974. He just had it appraised for his trust for $2,100,000. Now that’s an equity gain. And with our Prop 13 tax program…he just pays property taxes based on his original purchase price. Do you think he cares about the housing price price gains in March?

    And in terms of prices of homes…They very well may go down for the rest of the year…but at some point, they will rebound again. They always have and they always will. In the meantime…I’ll take that fluctuated pricing of a low of 3.5%-to a high of 8.2% increase year over year all day long.

    • Yep and you did see the comment about a double top.

      Those people that bought 12 years ago might have equity from paying there mortgage, but not from price increases.

      In my berg, prices are finally back to the 2007 top and yes there is upward pressure, but in 6-24 months the wheels will come off again and then write about your 3-8% return.

      While the rest of the country is flooding, our snowpack is building and I’m trying to determine where the cows go as the pasture I would summer in is going to be under water in 6 weeks.

  6. Dam…
    Out having an adult beverage and someone I know was telling me about the odd thing happening at city hall…
    Seems someone printed up free dump passes.. went into city hall and left them on the counter.. lol lol lol lol lol free to anyone wanting one..
    Then they asked… have you been a smart azz lately .. nope someone else did that one.. we had a great laugh..
    My bulletin board jokes..a really nasty receptionist.rude mean . So a visit with a friend in advertising and out comes a great poster on the urine bank and sample cups lol everyone was giving that receptionist a sample.. I think she gave herself one.. boxes of urine at her desk..lol lol
    But the free landfill passes… not me this time..I haven’t done something like that in years..
    The funny thing is they would ask..where did you get the pass..city hall lol lol..
    You gotta love it..

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