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Category Archive: ‘Same-House Sales’

San Diego Case-Shiller Index, Jan.

San Diego’s Case-Shiller Index for January, 2014 had the highest increase in the nation for seasonally-adjusted, month-over-month readings.

Our seasonally-adjusted index went up 1.8% between December and January!

Of course, having one of the warmest winters on record probably helped – do we need to be seasonally adjusted?

These are the non-seasonally adjusted numbers below:

Month
M-O-M
Y-O-Y
March ’13
+2.0%
+12.1%
April ’13
+2.8%
+14.7%
May ’13
+3.2%
+17.3%
June ’13
+2.8%
+19.3%
July ’13
+2.0%
+20.4%
August ’13
+1.8%
+21.5%
September ’13
+0.9%
+20.9%
October ’13
+0.3%
+19.7%
November ’13
+0.0%
+18.7%
December ’13
-0.1%
+18.0%
January ’14
+0.6%
+19.4%

“The housing recovery may have taken a breather due to the cold weather,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “Twelve cities reported declining prices in January vs. December; eight of those were worse than the month before. From the bottom in 2012, prices are up 23% and the housing market is showing signs of moving forward with more normal price increases.

“The Sun Belt showed the five highest monthly returns. Las Vegas was the leader with an increase of 1.1% followed by Miami at +0.7%. San Diego showed its best January performance of 0.6% since 2004. San Francisco and Tampa trailed closely at +0.5% and +0.4%. Elsewhere, New York and Washington D.C. stood out as they continued to improve and posted their highest year-over-year returns since 2006.

Here is the usual interview with Shiller: http://www.cnbc.com/id/101522276

During an interview with CNBC, Robert Shiller, the index’s co-founder and an economics professor at Yale University, characterized January’s growth as “good,” but cautioned that home price gains were slowing gradually. The overall market appears to be weakening, Shiller said, suggesting that the recent surge could due to speculative activity.

“I worry that [the housing market] is going to weaken more because I think investors are in the market,” Shiller said, adding that “they know there is momentum in house prices,” calling the recent price gains “enticing.”  Shiller added: “Now, you know, it may not last and these investors may be gone.”

The highest reading on this graph is 250.34 in November, 2005:

SD Case-Shiller Index history

Posted by on Mar 25, 2014 in Same-House Sales | 4 comments

San Diego Case-Shiller Dec. 2013

The November Case-Shiller Index reading of 194.15 for San Diego was about the same as October (194.07). Today, the December reading was released, at 193.87, which was a decline of 0.1%.

The Y-O-Y number is still a whopping +18.0%, but that should continue to taper off, even if prices go higher. We won’t see another spring with monthly gains of +2%, will we?

Month
M-O-M
Y-O-Y
March ’13
+2.0%
+12.1%
April ’13
+2.8%
+14.7%
May ’13
+3.2%
+17.3%
June ’13
+2.8%
+19.3%
July ’13
+2.0%
+20.4%
August ’13
+1.8%
+21.5%
September ’13
+0.9%
+20.9%
October ’13
+0.3%
+19.7%
November ’13
+0.0%
+18.7%
December ’13
-0.1%
+18.0%

San Diego CSI:

SD CSI-1

Posted by on Feb 25, 2014 in Market Conditions, Same-House Sales | 1 comment

San Diego Case-Shiller Nov. 2013

Our San Diego Case-Shiller Index has officially hit a flat spot.

The November, 2013 reading was 194.15, virtually the same as the previous month’s 194.07 number.

San Diego had the fourth-highest year-over-year total at +18.7%, but the majority of that frenzy-driven gain happened 8-12 calendar months ago (when appreciation was running 2%-3% per month).

Month
M-O-M
Y-O-Y
March ’13
+2.0%
+12.1%
April ’13
+2.8%
+14.7%
May ’13
+3.2%
+17.3%
June ’13
+2.8%
+19.3%
July ’13
+2.0%
+20.4%
August ’13
+1.8%
+21.5%
September ’13
+0.9%
+20.9%
October ’13
+0.3%
+19.7%
November ’13
+0.0%
+18.7%

The market has been cooling off for more than six months. The index has steadily declined since the May, 2013 reading, which had measured the gains from March, April, and May (purchasing decisions made a year ago).

Posted by on Jan 28, 2014 in Frenzy, Jim's Take on the Market, Same-House Sales | 2 comments

San Diego Case-Shiller Index, October

The local Case-Shiller Index slowed its ascent in October, but you won’t see many current homeowners complaining about a 19.72% increase for the last 12 months:

Month
M-O-M
Y-O-Y
March ’13
+2.0%
+12.1%
April ’13
+2.8%
+14.7%
May ’13
+3.2%
+17.3%
June ’13
+2.8%
+19.3%
July ’13
+2.0%
+20.4%
August ’13
+1.8%
+21.5%
September ’13
+0.9%
+20.9%
October ’13
+0.29%
+19.72%

The U.S. housing market could be in the early stages of yet another bubble, warned Robert Shiller, co-founder of the Case-Shiller index.

“In the housing market, it has its own momentum right now as people see it coming back. We’re sort of in the beginnings of another housing bubble,” the Nobel Prize-winning economist told CNBC.

Compared to a year earlier, prices were up 13.6 percent, beating expectations of 13 percent and marking the strongest gain since February 2006, when the increase was 13.8 percent.

Housing prices have been rising since early 2012, and a rebound in the sector has helped the U.S. recovery gain steam.

But the more subdued monthly gains “show we are living on borrowed time and the boom is fading,” David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in a statement.

“The key economic question facing housing is the Fed’s future course to scale back quantitative easing and how this will affect mortgage rates,” he said.

“We have a futures market that’s predicting the increase won’t stop until after 2018 so we still have time to go, but it might be weaker,” said Shiller.

“Things are changing fundamentally, and it seems people are less excited about big homes,” said Shiller, referring to housing trends. “The financial crisis kind of put a damper on that enthusiasm, especially big homes far away from the city center. There’s this new urbanism afloat. Housing is not one thing. It’s not monolithic. I think there might be a trend toward more urban living.”

http://www.cnbc.com/id/101303104

Posted by on Dec 31, 2013 in Same-House Sales | 5 comments

San Diego Case-Shiller Index – Sept.

I blew the Case-Shiller report on Tuesday, and didn’t figure it out until now.

Month
M-O-M
Y-O-Y
March ’13
+2.0%
+12.1%
April ’13
+2.8%
+14.7%
May ’13
+3.2%
+17.3%
June ’13
+2.8%
+19.3%
July ’13
+2.0%
+20.4%
August ’13
+1.8%
+21.5%
September ’13
+0.9%
+20.9%

From the video:

“I just don’t see evidence that people believe we are launching into a great new era” of home price appreciation,”that’s what we had in the early 2000s.”

“People are not so excited about the future,” in spite of record high stock prices (and surging home prices) as it seems the Fed’s plan was foiled again. They note that “we don’t want to go back to 2005,” even though “it would lift the economy” since “we know how that story ends.”

The hedge funds and ‘investors’ proclaim themselves long-term investors, but Shiller notes “they are not, what they have learned there is short-run momentum in the housing market,” and will bail at the first sign of that ebbing, “it’s different now, we can’t trust momentum.”

Other quotes:

  • “Real homebuyers are not as excited about the housing market as the price increases seem to suggest”
  • “It’s more of an unusual demand from investors that’s driving the market now”
  • “the market is driven more by psychology than affordability”

Posted by on Dec 1, 2013 in Same-House Sales | 0 comments

Mr. Bubble

rshillWith home prices soaring in many U.S. metropolitan areas, there’s already talk of another home price bubble.

Just last week, researchers at Trulia Inc. identified more than a dozen markets around the country where home prices are slightly ahead of fundamentals — including the Dallas area.

Most economists say that new worries about the recent rate of U.S. home price appreciation are overblown.

And that’s the view of probably the foremost expert on housing bubbles, Robert Shiller.

Shiller — co-creator of the closely followed S&P/Case-Shiller Home Price Index and a newly minted Nobel laureate in economics — attended a housing conference Friday at the Federal Reserve Bank of Dallas.

“Expectations have been gradually going up; they haven’t reached bubble-level expectations yet,” he told the group.

Shiller said price bubbles in housing and other commodities have more to do with psychology than economics.

“A speculative bubble is a kind of social epidemic of enthusiasm,” he said. “The contagion is spread by word of mouth and media-driven and also partly price-driven.

“In a speculative bubble, the price increases and the media stories generate attention.”

That’s certainly what happened starting a decade ago when the U.S. saw a record jump in housing prices.

“In 2004 and 2003, people thought they had a money machine” because of home price appreciation in many markets, Shiller said. “They were wrong about those expectations.”

Shiller was one of the first economists to warn of a dramatic home price correction, and, of course, he was right.

Nationally, home values plunged more than 40 percent, with some cities taking especially big hits.

With housing prices across the country up more than 12 percent this year, it’s understandable that some consumers are starting to fret about where housing is headed.

“Lots of people are worried that home prices in their city will outpace them,” Shiller said. “Maybe a housing bubble is more damaging than the others.

“We have a policy that encourages people to put their life savings into one undiversified investment.”

Shiller said his fame with regard to housing research has garnered invitations from around the world to discuss housing price trends.

“I tend to get invited to places that have bubbles,” he said. “Ever since I won that Nobel Prize my life has been busier than it’s ever been. You wouldn’t imagine.

“I’m really freaked out when people say, ‘I’m honored to meet you.’”

http://www.dallasnews.com/business/residential-real-estate/20131115-fears-of-housing-bubble-are-overblown-new-nobel-laureate-says-in-dallas-visit.ece

Posted by on Nov 16, 2013 in Same-House Sales | 1 comment

Same As 25 to 50 Years Ago

Quotes off yesterday’s Case-Shiller Index report:

http://www.cnbc.com/id/101152271

shill“I define a bubble as a time when people have extravagant expectations, and the expectations are driving home price increases,” said Robert Shiller, Case-Shiller index co-founder and Yale University professor of economics, in an interview with CNBC. “We don’t have the mindset of earlier this century.”

A drop in mortgage rates from the highs of the summer has not helped home sales, as higher home prices keep some buyers sidelined. The Realtors blame a steep decline in affordability, but Shiller disagreed.

“Affordability is still good compared to any time over the last 50 years. Mortgage rates are still around 4½ percent; that’s not high. Homes are still roughly, in real terms, where they were 25 to 50 years ago,” he said.

While inventories are still very low, they have come up about 6 percent from January to August, and that may ease price gains as well.

“With survey evidence pointing to a significant increase in the share of homeowners who view this as a good time to be marketing and selling a home, housing inventory will continue to rise,” noted Paul Diggle at Capital Economics. He is predicting just an 8 percent annual gain in home prices for all of 2013.

The wild card continues to be investors, who made up anywhere from 33 to 45 percent of homebuyers in September, depending on varying surveys. With prices rising and fewer distressed homes on the market, some investors are pulling back on purchases. The question remains, what will they do with the thousands of properties they already own?

“All these institutional investors are going to behave differently than the homeowner of the past,” noted Shiller. “That’s another reason to suspect that there could be a rapid turn down in the housing market, because these investors are not going to sit tight when home prices start falling. If they think they’re going to continue falling, they’ll get out.”

Shiller said he sees a tilt in public demand away from owner-occupied housing toward rental housing, even as the economy recovers. Homeownership has fallen from a high of 69.2 percent in 2004 to 65 percent in the second quarter of this year, according to the U.S. Census. He called it “good and natural” that tastes have changed.

Posted by on Oct 30, 2013 in Forecasts, Same-House Sales | 0 comments

‘Home Is Not An Investment Vehicle’

Congratulations to Robert Shiller for winning the Nobel Prize!

Trish Regan: “Then why buy a  home? People trap their savings in a home. They’re running an opportunity cost  of not having that money liquid to earn a better return in the market. Why do  it?”

Robert Shiller: “Absolutely!  Housing traditionally is not viewed as a great investment. It takes maintenance,  it depreciates, it goes out of style. All of those are problems. And there’s  technical progress in housing. So, new ones are better…

“So, why was it considered an investment? That  was a fad. That was an idea that took hold in the early 2000′s. And I don’t  expect it to come back. Not with the same force. So people might just decide,  “Yeah, I’ll diversify my portfolio. I’ll live in a rental.” That is a very  sensible thing for many people to do.

“If you think investing in housing is such a  great idea, why not invest in cars? Buy a car, mothball it, and sell it in 20 years. Obviously not a good idea because people won’t want our cars. It’s the  same with our houses. So, they’re not really an investment vehicle.”

Read more:  http://www.businessinsider.com/nobel-prize-robert-shiller-housing-not-great-investment-2013-10#ixzz2ho7fOzHz

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Reasons to Own:

  • Security of knowing where you will be living.
  • Security of tying down the major housing expenses.
  • The prospect of not having a mortgage payment someday.
  • Certainty of having the kids grow up in the same house.
  • Make your wife happy! (Shiller said it again in this video).

None of these may have much, if any, investment value.  Can we stop talking about housing as an investment? Why are we addicted to that conversation? Buy a house because you need a place to live.

Posted by on Oct 15, 2013 in Jim's Take on the Market, Market Conditions, Same-House Sales | 12 comments

Shiller on ‘Bubble Mentality’

While the real estate market has been bubbling, Robert J. Shiller doesn’t think we are in a real estate bubble.  At least not yet.  Shiller who, along with Karl Case, developed the S&P/Case-Shiller Composite Home Price Index, wrote a column for the this Sunday’s New York Times explaining why 2013 is not 2004.

The Case-Shiller 10-City Composite Index has seen a real, inflation-corrected rise of 18.4 percent in the 16 months ended in July, Shiller said, only about 4 basis points below the largest 16 month increase during the years-long run-up to the 2008 financial crisis.  Is it possible, Shiller asks, “that we are lapsing into what I call a bubble mentality – a self-reinforcing cycle of popular belief that prices can only go higher?”

He sees a lot of differences between then – the pre-2008 period – and now and uses the results of this year’s installment of a survey he and Case have conducted since 2003 to illustrate them.  The survey involves sending questionnaire to a random sample of recent homebuyers in Boston, Milwaukee, Los Angeles, and San Francisco.  The results from the most recent survey conducted in May and June suggest, Shiller said, that we are not in a bubble now but there are troubling signs we may be heading into one.

Read the full story here:

http://www.mortgagenewsdaily.com/09302013_housing_prices.asp

Posted by on Sep 30, 2013 in Same-House Sales | 3 comments