Housing Rollover Begins

Economics runs in reasonably clear cycles.  At the moment, we are at (or just past) the top of a Housing cycle.

The bottom, you’ll recall, was the spring of 2009.  Prices firmed into 2010 as corporations bet on running rental pools of repossessed homes.

Since then, it would be hard to find a better personal investment.  Yet, when the worm begins to turn, you can see it.  Our Houston Bureau called our attention to a cloud of articles like Home buyers are backing out of contracts in the Sun Belt, especially in Las Vegas, Phoenix, Tampa and Texas – MarketWatch.

This is critical context going into the Case Shiller data which has just been released under the headline “S&P CORELOGIC CASE-SHILLER INDEX CONTINUED ITS DECELERATION IN JULY:”

NEW YORK, SEPTEMBER 27, 2022: S&P Dow Jones Indices (S&P DJI) today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 15.8% annual gain in July, down from 18.1% in the previous month. The 10-City Composite annual increase came in at 14.9%, down from 17.4% in the previous month. The 20-City Composite posted a 16.1% year-over-year gain, down from 18.7% in the previous month.

Tampa, Miami, and Dallas reported the highest year-over-year gains among the 20 cities in July. Tampa led the way with a 31.8% year-over-year price increase, followed by Miami in second with a
31.7% increase, and Dallas in third with a 24.7% increase. All 20 cities reported lower price increases in the year ending July 2022 versus the year ending June 2022.

Before seasonal adjustment, the U.S. National Index posted a -0.3% month-over-month decrease in July, while the 10-City and 20-City Composites both posted decreases of -0.8%.
After seasonal adjustment, the U.S. National Index posted a month-over-month decrease of -0.2%, and the 10-City and 20-City Composites posted decreases of -0.5% and -0.4%, respectively. In July, only 7 cities reported increases before and after seasonal adjustments.

“Although U.S. housing prices remain substantially above their year-ago levels, July’s report reflects a forceful deceleration,” says Craig J. Lazzara, Managing Director at S&P DJI. “For example, while the
National Composite Index rose by 15.8% in the 12 months ended July 2022, its year-over-year price rise in June was 18.1%. The -2.3% difference between those two monthly rates of gain is the largest
deceleration in the history of the index. We saw similar patterns in our 10-City Composite (up 14.9% in July vs. 17.4% in June) and our 20-City Composite (up 16.1% in July vs. 18.7% in June). On a month-over-month basis, all three composites declined in July.”

Key is the home price index chart:

As we advised before this came out, make sure you’re clear on the “driving through the rearview” aspects of this.  These are July data points.  October is only a few days off.

A lot of people did notice this, and the report whacked about a hundred points off Dow futures which were running too hot, too early, anyway.

More on Peoplenomics.com tomorrow,


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George Ure
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12 thoughts on “Housing Rollover Begins”

  1. ” Home buyers are backing out of contracts”

    That’s part of the “what can’t be paid, won’t” philosophy.

    The seller ‘sold’ their home. Now the buyer can’t perform.

    It doesn’t matter what the seller says, thinks, does. The buyer can’t perform. The buyer may even get their deposit back leaving the seller more lurched.

    Maybe the seller prematurely blew the dough. That’s a cascade problem for the seller. The buyer is gone.

    New task. Find a new buyer for the same price in a declining market.

  2. “Decelleration” of the rate of the gains … NOT a “Price Drop”

    BIG DIFFERENCE, do not confuse the two.

    As many have noted already the majority of the “real estate bubble” issue this time around has been because of Mortgage Rates, NOT because of loose lending standards. Mortgages at 2.5% back in 2021 were below ANY TIME in American history, including during the depths of the Great Depression or any of the deep depressions of the 1800’s.

    Under a Bond Model pricing analysis a rise in 30 yr mortgage interest rates from 2.5% a year ago to 6.25% (last week’s rate) effectively takes the value of the property down by about 50% based upon the payment stream required (ignoring any property tax add on payments).

    In my long time experience wrt real estate valuation issues (big commercial properties but I do pay attention to residential real estate) when pricing goes over the top after a bubble event pricing is sticky on the downside so sales tend to dry up FIRST before price drops, sales sometimes almost stoping. when real esate is going UP pricing is VERY fluid with no stickiness at all to it).

    People, both in the commerical sector and even WORSE in the residental sector, are LOATH to lower prices to match the new market clearing pricing when the market is going down, which is why for residential pricing the price bottom is usually NOT HIT bottom until 24 to 48 months AFTER the price peak (historically the range, 30-36 is most common but sometimes if the populous is stubborn or foreclosures are legally difficult it does take 48 months to clear the overhang upside down in value inventory).

    Part of the longer lag time for residential pricing to drop compared to commercial property is caused by both the mindset of the sellers and also because of legal constraints. In many places it takes a LONG TIME for foreclosures of RESIDENTIAL properties to actually happen after people stop paying on their mortages and for the property to actually BE SOLD, at market clearing pricing. Long foreclosure times PLUS being held for extended periods of time in bank inventory both add to this extended time line for residential prperties (after 2008 bubble peak the average bank holding period AFTER foreclosure in Florida for example was near 12 months tending towards 18 months for some lending institutions – remember some FLA lenders themselves went bankrupt /into liquidation which extended out the time for them by a considerable amount). (the intrusion of the big investment firms that are now primed to come in and buy hundreds to thousands of houses /condos at a time will probably speed up the bank liguidation timing once a property becomes bank owned when we do go over the top this time compared to times past, probably shortening it by about 6 to 10 months imo).

    The Rate of Increase of pricing appreciation has slowed … but that dosn’t mean that residential real estate pricing has peaked. It is STILL GOING UP Keep that difference in mind.

    (growing propulation in an area with government mandated restrictions on more construction OR new higher density construction creates a supply/demand imbalance which will tend to force prices UP all other things being equal. this is a HUGE problem in a lot of fast growing areas in the US with heavy handed zoning controls – which can also include heavy handed requirements on how a proprty /subdivision has to be built – Levittown, and it’s clones, could NOT be built today in other words, ANYWHERE in the US)

    • Just told my husband the same thing today; something made me realize, they are preparing for something BIG.

      Did YOU know?



      It feels a lot like when we started morphing from writing letters to using computer email programs…then that morphed to paying bills on line and all of a sudden the Post Office is having problems, but the people are saving money on stamps….

      Cheaper means of sending money to the country of your choice?

      The G20 is working with em: “cross-border funds transfers and payments.”

      Ways to sway the people.

      CBDC’s: Central Bank Digital Currency.

      9(d) The term “digital assets” refers to all CBDCs, regardless of the technology used, and to other representations of value, financial assets and instruments, or claims that are used to make payments or investments, or to transmit or exchange funds or the equivalent thereof, that are issued or represented in digital form through the use of distributed ledger technology. For example, digital assets include cryptocurrencies, stablecoins, and CBDCs. Regardless of the label used, a digital asset may be, among other things, a security, a commodity, a derivative, or other financial product. Digital assets may be exchanged across digital asset trading platforms, including centralized and decentralized finance platforms, or through peer-to-peer technologies.

      9(e) The term “stablecoins” refers to a category of cryptocurrencies with mechanisms that are aimed at maintaining a stable value, such as by pegging the value of the coin to a specific currency, asset, or pool of assets or by algorithmically controlling supply in response to changes in demand in order to stabilize value.

      It is coming, everyone, …. soon to a banking establishment near you.

  3. Hey been watching how pacific northwestern storms have been coming close to the coast then heading out to sea with the sparkling clouds below never saw that before in the gulf or Atlantic till yesterday think florida is going to be hit where they least expect it think its starlink weather mods that’s why you still dont have service

  4. pricing may or may not continue upwards. it really depends upon the dollar, if the dollars is salvaged and hyperinflation is somehow avoided (I don’t see how, except a much needed gutting of the federal government).

    we are in uncertain times and Nordstrom 1 and 2. developing leaks within hours of each other is concerning. it is either a lie or malfeasance. a lie and Russia is putting the thumb screws on, malfeasançe and who knows if the corrupt US govt is trying to destroy western economies including the US’.

    • iamwhoiam:

      I do believe that you are closer to the truth with the 2nd half of your last sentence: …’and who knows if the corrupt US govt is trying to destroy western economies including the US’.

      I’d take that for 100 Squadrillion, Alex.

      Let’s take them all down, ANNO ONE (of the New Long Count) DOMINO AFTER ANOTHER.

      Gotta destroy to rebuild in the Craven Graven Golden Digital Coin image.

      911, Twin Towers; abject example of 1.5 hours to destroy which took 14 years to build.

  5. Explosive-Laden Drone Found Near Nord Stream Pipeline

    Ruling out sabotage, the Swedish military has successfully cleared a remote operated vehicle (drone) rigged with explosives found near Line 2 of the Nord Stream Natural Gas offshore pipeline system.

    The vehicle was discovered during a routine survey operation as part of the annual integrity assessment of the Nord Stream pipeline. Since it was within the Swedish Exclusive Economic Zone (EEZ) approximately 120 km away from the island of Gotland, the Swedes called on their armed forces to remove and ultimately disarm the object.

    “We don’t consider it to be dangerous to merchant vessels or the pipeline at this point,” Jesper Stolpe, Swedish Armed Forces spokesman, told Radio Sweden. According to Stolpe, the cable used to control the drone and to set off the explosive was cut off, so at the moment the vehicle is relatively harmless.

    The national identity of the drone has not been verified so far, as many countries use Unmanned Underwater Vehicles (UUVs) of a similar construction, Stolpe said

    Nord Stream, RT

    Wasn’t the U.S. accused of cutting data cables in the Mediterranean and I think in the Indian Ocean back in the 2000s?

  6. Well the language is present. Not the same place. When looking into that far into the future as it doesn’t pertain to anything in my direct vicinity? It’s hard to understand the fast moving “Rorschach” like abstract images and what they indicate. From my read way back then, it is my understanding the following sequence in that region is an attack on the Dome of the Rock, which will escalate high intensity emotional values between the decendants of Ishmael (Muslems) and the decendants of Isaac (Hebrews) and is a catalyst for a direct conventional conflict between Iran and Isreal.

    If memory serves. It is mossad influenced attack. And that information is leaked. And a great cry for peace. And then a new leader is thrust to the main stage.

    Along with the breaking news of a modern day version of hidden version Ashwits in the region as well with some escapes coming forward.

    Honestly I haven’t looked that far into the future in a while with the exception of the US as it relates to who is the next president since I predicted the last two before they became president in succession naming Trump before he won his republican nomination and Biden after him in the same post on another venue. The same place has the next presidential who won, mainly to re-unify the United States after a period of much turmoil. Since the US is the Revived Roman Empire. Sharing a capital very similar to the Vatican in structure and design, as it relates to the Book of Revelations.

    Hmmmmmm………… won.

    Thanks for the info. I’m busy considering other things.

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