Case-Shiller: Beware the Head Fake
There was some reason to take comfort about yesterday’s data from the Case-Shiller Index—the rate of price declines slowed for the third straight month nationally. But before you break out the champagne and check books, get a dose of what the Wall Street Journal had to say yesterday: The bloodletting may not be over. Here’s…
There was some reason to take comfort about yesterday’s data from the Case-Shiller Index—the rate of price declines slowed for the third straight month nationally. But before you break out the champagne and check books, get a dose of what the Wall Street Journal had to say yesterday:
The bloodletting may not be over. Here’s why: If price declines accelerate for the mid-to-upper end of the housing market, then that could generate enough large declines in values—even among a small segment of the overall housing market—to push the index lower still.
Meanwhile, here in New York (where there’s plenty of “mid-to-upper” properties) housing prices ticked down another 1.6 percent in April for a total of 21 percent off the June 2008 high, as the chart above shows.
DIBS –
there are problems with every so called leading indicator, so I agree with you about that.
However, since you are in love with the idea that the stock market is an indicator of rising home prices, you should consider that the stock market has been rising on thin volume. And worse yet, down days have seen much heavier trading than up days. In other words, an ever smaller pool of greater fools has been accounting for the rise in prices. Sounds a lot like the former housing boom.
There is always the possibility of a …
Dead Cat Bounce
I have two theories about dibs: either he has a major personality disorder, a meth addiction, or he just doesn’t exist, and b-stoner made him up to bait us all day.
dibs are you seriously telling us that higher rates are going to be good for the housing market?
Yes, but you specifically posted it to try and discredit my thoughts. I did not bring up Winkler.
Oh for heavens’ sake dibs it’s not a competition. Most people on this board probably have no clue who Winkler is, so since you brought it up I posted his info so they can draw their own conclusions.
peace out!
Actually, as rates start to rise, borrowers crowd into the market fearing further rises. That didn’t happen over the past few weeks because of the tighter lending policies.
Give us a hint at your credentials and your experience in buying/selling properties.
There are problems with every predictor theory. Most people actually in finance believe this is the best one out there. There is no larger sample size than the trading activity in the market.
I think you’ve blathered back the
popular misconceptions.
dibs an MBA is not an economics credential. Sorry.
Listen. An elaborate argument is the surest sign of a weak thesis. Keep it simple. When rates go up, housing gets less affordable, and its price falls to compnsate. You are WAY overthinking it.
DIBS is at it again.
Even those who believe that the stock market is a leading indicator of economic activity recognize that there is at best a loose corelation. A favorite aphorism is “the stock market forecast 5 out of the last 3 recessions.”
if you would take the time to do the analysis yourself you would see that there are enormous problems with the stock market predictor theory. The most obvious one is that the sample size is miniscule.
On the otherhand, there is a huge body of evidence connecting employment data with home values. In order to believe that home prices in NYC are going up you must also believe that employment at the high end is either about to rebound imminently, or has already turned up. That is magical thinking.
I’m still looking for any sign of a …
Dead Cat Bounce
P.S. DIBS why don’t you do a little homework instead of blathering back the common garbage?
Oh yeah, and I’ve been a regular contributor to the Asian columns in the WSJ (Craig karmin) and Barrons (Leslie Norton) from 1998-2007. Can’t now because we are an uregistered hedge fund and no “advertising” is allowed.