Case-Shiller Decline is steep this month

[Randolph Kinney]

This graph covers a 2-year time span and it's informative enough for that time period. However, if you were to look at this type of information dating back 20 or 30 years it would provide some context that the talking heads would probably prefer that you not have.

If you were to look at the long term trends I highly doubt you'd conclude that the end was near, even for the lower end.

George,

Here is the CS index for San Diego for the last big market correction of home prices. Note it was the high price homes that increased the most and it was the high price homes that decreased the most.

On thing for sure, the correction this time is more severe than last and it is not over. Reversion to the mean trend.

 

[Metamorphic]

Any ideas on why the tiers traveled together up untill about 2000, when they started to diverge so dramatically? Is this typical of all the CS graphs or just San Diego?

 

[Terrel L. Shields]

Oh ye doubters and Chicken Littles.....the Truth is Little Lawwy Yun. My copy of Realtor came today. These are the jewels from Dr. Polly Anna.

"Outlook turns Rosy" "Cincinnati is likely to experience home price gains in the 20 percent to 30 percent range.." ""Miami...50%" "Home sales have stabilized over the last seven months and are expected to increase over the rest of 2008." "we've put the worst behind us."

 

[Bama Bayou]

Any ideas on why the tiers traveled together up untill about 2000, when they started to diverge so dramatically? Is this typical of all the CS graphs or just San Diego?

That could be the effect of McMansions. I have a submarket that looks very similar, but with much stronger price decreases since 2005.

 

[c w d]

Any ideas on why the tiers traveled together up untill about 2000, when they started to diverge so dramatically? Is this typical of all the CS graphs or just San Diego?

Could it be an indication of the divergence of increasing wealth in the country?

 

[Randolph Kinney]

Any ideas on why the tiers traveled together up untill about 2000, when they started to diverge so dramatically? Is this typical of all the CS graphs or just San Diego?

The problem you are seeing is the time scale is too large, which produces or captures the total variation and that was huge. Therefore the past data tiers are very compressed and do not show what the relationships are for that time frame. Look at the previous graph of 1989 through 1994.

Here is the graph of 1994 through 1999. Notice the high price homes were increasing in value most. That trend did not hold for the last run up.

 

[Randolph Kinney]

Could it be an indication of the divergence of increasing wealth in the country?

Here is the price run up from 1999 through 2006. Notice how the low price homes disproportionately increased over the mid price and high price homes.

Reason? Cheap money and credit with a tremendous amount of speculation financed with lax underwriting. Realtors, mortgage brokers, investors and renters were buying first time homes, second, third, and fourth homes.

The foreclosures are killing the low price tier.

 

[BOBBYGINE]

My 10 year median sales graph in my area looks almost identical to the Case Shiller Index Graph. Not a pretty picture. The bottom may be close at the speed we are traveling down but the recovery is never. Our country has been sold out the back of the store, anyone notice all those big buildings being put up around the world, its a great time for people who don't live in the dollar bubble.

 

[Bama Bayou]

Oh ye doubters and Chicken Littles.....the Truth is Little Lawwy Yun. My copy of Realtor came today. These are the jewels from Dr. Polly Anna.

"Outlook turns Rosy" "Cincinnati is likely to experience home price gains in the 20 percent to 30 percent range.." ""Miami...50%" "Home sales have stabilized over the last seven months and are expected to increase over the rest of 2008." "we've put the worst behind us."

The only people with worse reputations than appraisers are NAR economists.

 

[mwbode]

Oh ye doubters and Chicken Littles.....the Truth is Little Lawwy Yun. My copy of Realtor came today. These are the jewels from Dr. Polly Anna.

""Miami...50%" "Home sales have stabilized over the last seven months and are expected to increase over the rest of 2008." "we've put the worst behind us."

I am writing files in Miami that are 46% below the prior sales in 2005 with no signs of any stabalization. Massive oversupply with a growing trend of the general population saying "screw it, the bank can have the house". Furthermore, a number of major banks are no longer funding anything new in Miami-Dade so the life line is being cut off. Any quack that expects gains in Miami over the near term future should be committed. :Eyecrazy: