The S&P/Case Shiller® composite index for the month of August was released yesterday.
"'There was some weakness in the monthly statistics, as 10 of the cities post price declines in August over July,' says David M. Blitzer, Chairman of the Index Committee at S&P Indices. 'And even though the annual rates are largely improving, 18 MSAs and both Composites are still negative. Nationally, home prices are still below where they were a year ago. The 10-City Composite is down 3.5% and the 20-City is down 3.8% compared to August 2010.'
'In the August data, the good news is continued improvement in the annual rates of change in home prices. In spring and summer’s seasonally strong period for housing demand, we cautioned that monthly increases in prices had to be paired with improvement in annual rates before anyone could declare that the market might be stabilizing. With 16 of 20 cities and both Composites seeing their annual rates of change improve in August, we see a modest glimmer of hope with these data. As of August 2011, the crisis low for the 10-City Composite was back in April 2009; whereas it was a more recent March 2011 for the 20-City Composite. Both are about 3.9% above their relative lows.'
'...As seen in our past few monthly reports, there were large revisions across some of the MSAs. In particular, Washington DC was the most affected in August. Additional sale pairs data for May - July 2011 in the Washington DC MSA were received this month and resulted in the revisions.'"
6 comments:
Harriet -- I like the upgrade with the red & black numbers to see when things are negative vs positive. Nicely done!
As Kevin oh so correctly pointed out, the revised numbers did push the YOY results (2nd derivative) negative. This august number will likely be revised downward (next month) and still show the prices falling slightly on a YOY basis. I remain resonably confident that a 2nd derivative inflection point (currently June 2011) will hold, and we will not ever sniff that March 2009 value of 165 ever again. Still, there is decent evidence to suggest prices are currently falling.
What I also find interesting is that after the first revision (which is almost always down) they do a 2nd revision (mostly down) then a 3rd revision (which is often up).
Thus, if recent CS pattern for DC holds here is what we will see:
1. The current posted value for August (187.57) is likely optimistic.
2. In late Nov when the next CS comes out, that August value will be revised downward significantly (say to 185 or so).
3. In late Dec, the August value will be revised downward again, say from 185 to 184.2.
4. In early Jan, the August value will be revised (hopefully the last time) slightly up, say, from 184.2 to 184.5
5. In early Feb, the August value will remain unchanged (i.e. no further reversions necessary) staying at 184.5
Those revised values arent predictions but you get the idea. Hopefully this maddening revision thing wont continue for too long, but applying my logic above, I think the last number we can reasonably rely on today is the April 2011 number of 178.74.
seems like in March, the CS Index will also redecline providing a
new 177 Rebottom.
So that over 3 years, we will see
a 2% gain over 3 years....
Wow.
"Pat said...
So that over 3 years, we will see
a 2% gain over 3 years....
Wow."
How so?
March 2009 = 165
March 2011 = 177
Thats a 7% gain in 2 years. Am I missing something?
anon
2% annuallized gain.
my typo.
Pat said...anon
2% annuallized gain.
my typo.
Gotcha.
Sweet. A 2% annualized gain on my 5 to 1 leveraged investment.
If that's the call of a housing bear, I hope everyone realizes what a great investment home ownership is!
My $0.02
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