Case Shiller Index Falls 15.3%

For some reason, the Case Shiller PDF keeps showing a 404 error fixed.


chart courtesy of S&P

Here is a quick overview via my pal Peter Bookvar:

The April S&P/Case-Shiller Home Price Index of 20 cities fell 15.3% y/o/y, a touch better than the expectations of a 16% decline but its still the biggest drop on record with this survey. All 20 saw y/o/y declines with the worst being in Las Vegas, Miami, Phoenix, LA, San Diego and San Francisco. The weakness in these markets are obvious to us all and not surprising, but the degree of further weakness remains the question. New York fell 8.4% and Boston fell 6.4%. Charlotte had the smallest y/o/y decline, falling .12%. This measurement includes both conventional and jumbo loans. OFHEO HPI that is out at 10am will include just conventional but will measure more markets.

More later . . .


TFS Derivatives


Steep Declines in Home Prices Continued in April 2008

June 24,2008


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What's been said:

Discussions found on the web:
  1. OldBrokenRecord commented on Jun 24

    The 404 error is S&P’s version of NYSE circuit breakers… Speaking of which, we should see those being triggered for the next 2 weeks.

  2. Mike in NOLA commented on Jun 24

    BTW, here’s a new way for developers to liquidate their inventory at only a 3% discount-onto us:

  3. Steve Barry commented on Jun 24

    Kudlow and Burnett tried to wheedle a positive spin out of the guy from S&P on the numbers…they succeeded somewhat as he said the m/m were better than expected, though he briefly mentioned they were not seasonally adjusted.

    Erin looked at Larry like they just won $500 in the lottery. It’s pathetic how these analysts all are vying to be the first to declare a bottom is forming. See you at Dow 4000.

  4. Don commented on Jun 24

    Charlotte may not have been impacted yet, because they never had as big a run up. But what’s going to happen when Wachovia and BAC start whacking payrolls?

  5. Steve Barry commented on Jun 24

    The year over year numbers are horrifying to the masses. Not to myself, or anyone else who (due to the joys of TA) can look at a housing chart and make sense of it. To us, it is just the beginning.

    Barry, I beg you again…try to get us a more recent update to Shiller’s chart. Can’t you call him?

  6. Innocent Bystander commented on Jun 24

    Does this mean the market will close up 200 pts. today?

  7. dark1p commented on Jun 24


    Maybe the Nasdaq, but I don’t know about the Dow….

  8. Phil Izzo commented on Jun 24

    From the peak in July 2006 through April 2008, the 20-city Case-Shiller home price index is down almost 18%. If we project to the end of June, the cumulative drop is likely close to 20%. Many analysts have generated a lot of sensational headlines and scared a lot of people by talking about a 30% peak-to-trough fall in home prices. Assuming that they are referring to the Case-Shiller data, we may already be two-thirds of the way there… In contrast to Case-Shiller, the OFHEO index peaked later (April 2007), has been less volatile (both in the run-up and the fall), and has shown a less pronounced month-to-month pattern… Most economists and analysts seem to have embraced the Case-Shiller index as their sole indicator of national home prices… In our view, the best way to measure national home prices is probably to average the two gauges. By that yardstick, home prices are down by over 11% through April on the way, in our view, to something like a 20% fall.
    –Stephen Stanley, RBS Greenwich Capital

    The Case-Shiller indices are dropping much more than other house price measures. The Office of Federal Housing Enterprise Oversight (Ofheo) monthly house price purchase index, for example, was down 4.6% (year-to-year) in April, while the National Association of Realtor’s median price was down 8.5%. Unfortunately, all methods devised to measure house prices have shortcomings, and it is impossible to state with any precision how much house prices are actually falling nationally or locally. During 1990-2000, the Case-Shiller 10-City Composite Index was flat, after adjusting for inflation. During 2000-06, its real value rose 78%. The index has dropped about 24% in real terms since peaking. But given the current level of unsold homes on the market, the number of foreclosures already in or about to enter the pipeline, and the run-up in prices over 2000-06, this index is likely to drop much more.
    –Patrick Newport, Global Insight

    The month-over-month declines in the Case-Shiller index have moderated a bit in the last couple months. Some of the moderation appears to be a real shift — though only over two months — and some of it is strictly seasonal. The month-over-month change in the 20-city composite bottomed at -2.6% in February before edging up to -2.2% in March and -1.4% in April. After running the index through a standard seasonal adjustment program, the index shows changes of -2.5% in February, -2.1% in March, and -1.8% in April… The broader coverage of subprime and Alt-A loans in the Case-Shiller index is probably one reason that the index is falling faster. This is because these types of mortgages are experiencing high rates of foreclosure, and there is some anecdotal and statistical evidence that foreclosed homes are being sold at significant discounts.
    –Abiel Reinhart, J.P. Morgan

    The weakness has not been contained to the bubble markets [in the S&P/Case-Shiller index]. Home prices are now falling in all 20 cities surveyed, with Charlotte being the last city to fall. On a monthly basis, prices surprisingly rose in 8 cities. However, we attribute most of unexpected increase to seasonal distortions as prices are typically higher during the spring selling season
    –Michelle Meyer, Lehman Brothers

    Cleveland, where prices have collapsed and given up almost all their gains this decade, led the way with a out-size 2.94% month-to-month gain [in the S&P/Case-Shiller index]. Increasingly affordable as prices in Cleveland are doubtless becoming, this jump is probably erratic and should be treated with suspicion. But modest price gains in cities such as Dallas, Charlotte/Portland are more readily believable given their favorable demographics and the increasing attraction of buying vs. renting as prices have slipped in these areas. Dallas, where prices also posted a healthy m/m gain in March, are likely benefiting from record oil prices.
    –Richard Iley, BNP Paribas

  9. Redfish Mark commented on Jun 24

    Don is right on the mark – the year-over-year numbers have the chicken littles running for cover, though understanding the basic facts of real estate market cycles have others looking for great values. Markets with reasonable fundamentals (there are a few) don’t make headlines.

  10. BG commented on Jun 24


    It could be that the data has not yet caught up with reality here.

    I heard on the local news last night that Mecklenburg County is going into select depressed areas of the City and BUYING houses! I kid you not. They have spent $485K so far. Unbelievable! (I hope I dreamed that; but, I don’t think I did.)

    Mecklenburg County already has a shortfall in the School budget for next year; but, still feel they need to buy properties in depressed neighborhoods within the City? Makes no sense.

  11. Andrew Schmitt commented on Jun 24

    I think there are some errors in the column headings of the graphic.

    Would be interesting to see how MLS listing prices track Case/Schiller. My limited research indicates list prices are in Fantasyland (also a place in CA and FL)

    Example: I started looking at property in CA just to get an idea of where things stood. The listing prices haven’t changed much in the last 2 years. Records indicate transactions (volume) are way down.

    If you talk to a Realtor it is pretty clear the list price is complete BS. Which leads me to believe we still have a ways to go for the market to clear.

    Just can’t wait to see the carnage this causes in the CA cities property tax revenue. Muahahahahaha!

    Waiting for that cheap buy in Santa Barbara County….

  12. HCF commented on Jun 24

    Anyone been watching CNBC today?

    It’s pathetic how much cheerleading is going on today. Every other segment is “Could this be the bottom?” I guess it is, well, until the next bottom gets made.

    So much for “fast, actionable, UNBIASED.”

  13. michange commented on Jun 24’s latest contrary indicator :

    “Jun 24 2008 6:00PM EDT
    After the Bust At ground zero of the housing slump, no turnaround is in sight.”

  14. sean commented on Jun 24

    Is there an ETF or other shortable investment vehicle based on this?

  15. jz commented on Jun 25

    Barry, I think this is a case where your headline is not matching reality. If you look at the second table and just look at the you have five up markets, five down markets, and Atlanta is a push. However, I checked out median prices in Atlanta on, and the median home price is up.

    And when you look at Phoenix and Vegas, two other bubble markets, the median price is down to $225,000 and $190,000 respectively. That is a price that two adults working full time can afford. The median price last year in Vegas was $300,000. Sure, there are parts of the country in California and Florida that have a lot further to fall IMO.

    However, I think your headline does not reflect the fact that probably half of the country has hit a bottom in real estate, and much of the other half doesn’t have much further to fall.

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