The Oct 20 city S&P/CS home price index fell 1% vs expectations of a fall of .6%. The y/o/y fall was .8% vs the forecast of a drop of .2%. The overall price index fell for a 3rd month and is at the lowest since May. With politics being the main job growth story, Washington DC led the y/o/y gains followed by LA, San Diego and San Fran. California is a state with one of the biggest foreclosure rates over the past few years and with that, the faster the downward adjustment in prices, the quicker they bounce back as inventory is cleared. Maybe a lesson to be learned for other states. The other 16 cities saw y/o/y price declines led by Chicago, Atlanta, Detroit and Phoenix. Overall prices are now just 4.4% off its low in Apr ’09 and is 30% off its record high in July ’06. Bottom line, many assumptions of economic growth and the quality of bank balance sheets don’t assume a housing double dip and thus the recent trend bears watching.
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