S&P/CaseShiller home price index

The Feb S&P/CaseShiller 20 city home price index fell 18.63% y/o/y, a touch better than expected but with a slight downward revision to Jan to a fall of 19%. The index is now down 30.7% from its record high in July
’06. Both on a m/o/m and y/o/y basis, all 20 cities saw declines. The y/o/y declines saw the same culprits leading the way, Phoenix, Las Vegas, San Francisco, and Miami. The smallest decline both m/o/m and
y/o/y was in Dallas.

The bank ‘stress test’ adverse scenario assumed a top to bottom fall of about 45% in the 10 city index which would imply another 20% fall from here in house prices. Unlike the FHFA report, CaseShiller does include jumbo’s, subprime and alt a backed mortgages but isn’t as geographically diverse in its coverage. With months supply still almost twice the long term average, economics 101 says that prices still have further to fall.

Although the information contained herein has been obtained from sources Miller Tabak + Co., LLC believes to be reliable, its accuracy and completeness cannot be guaranteed. This report is for informational purposes only and under no circumstances is it to be construed as an offer to sell, or a solicitation to buy, any security. At various times
we may have positions in and effect transactions in securities referred to herein. Any recommendation contained in this report may not be appropriate for all investors. Trading options is not suitable for all investors and involves risk of loss. Although the information contained in the subject report (not including disclosures contained herein) has been obtained from sources we believe to be reliable, the accuracy and completeness of such information and the opinions expressed herein cannot be guaranteed. An options disclosure document may be obtained from Mr. Jay Stenberg, Miller Tabak + Co., LLC., 331 Madison Avenue, New York, NY 10017. Additional information is available upon request.

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