I have been very unequivocal about my view of Housing market — its not anywhere people should be expecting ordinary year over year price appreciation. As the recent Case Shiller data shows, this is still a market where despite record low mortgage interest rates, prices are falling. A normalized market is probably many years away still.
So I find it encouraging when Robert Shiller states a similar view:
BLODGET: A lot of people have just called the bottom in the housing market in the United States, and there’s been some okay data recently. Is that your take? That finally housing prices are bottoming?
SHILLER: When people phrase is that way, they say ‘we’ve reached the bottom.’ That suggests that we have the expectation of a major turning point right now. But I don’t see that. I don’t see any reason to think that prices are going to start heading up dramatically now. We do have some good news. Permits are up. Notably, the National Association of Homebuilders Housing Market Index is up and that’s a forward looking index. But it’s not up very much. If you look at the rate of change it looks dramatic but it’s still at a low level.
As the charts below show, there is an enormous difference between a reversal and merely scraping along the bottom . . .
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See also Video: Barry Ritholtz: A Housing Bottom Is Nowhere In Sight
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Click to enlarge:
Source: Bianco Research
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