May 9th, 2011
Econintersect: Another housing market tracking index is showing a double dip. Clear Capital’s HDI (Home Data Index) has dipped below the previous cycle low of March 2009. This joins other housing market tracking services in reaching a new low. Both CoreLogic and the NAR (National Association of Realtors) showed new lows for home sales median prices last month, as reviewed by Steven Hansen at GEI Analysis. The widely followed S&P / Case-Shiller Home Price Indices have not yet quite reached the double dip level, but that data is 1-2 months older than the others. The latest Case-Shiller data has been reported only through February, whereas the others are all at least through March. Clear Capital is the first to report April data. Follow up:
Follow up:The graph below is from GEI Analysis (Hansen). Note that the February Case-Shiller line (blue) in the graph is visually indistinguishable from the April 2009 low for that data set. Hansen reported that that the latest reading was actually still higher – by 0.0072%!
A house price tracking service from Altos Research follows the market for asking prices of high end homes. Altos’ data showed a double dip occurring in October 2010. From the crossing point in October below the March 2009 low near $565,000, median asking price fell like a lead brick to approximately $460,000 in February. That was decline of approximately 18% - in just four months! But, unlike the other indexes, Altos has shown a rebound in median asking price of nearly $20,000 by April (more than 4%). A counter trend bounce is to be expected after any big move so the uptick should not be surprising. Altos has also indicated they see this as a normal spring move in price. And remember that hope springs eternal - these are asking prices.
Some local markets are better than the national averages. And, of course, some markets are much worse. Keith Jurow, author of the subscription service Minyanville Housing Market Report, says that the markets with the biggest bubbles, such as Las Vegas and Miami, still have a tremendous number of foreclosures yet to take place. The bottoms in these markets may come long after much of the rest of the country. Jurow analyzed the Las Vegas market in depth in the previous issue of his report (which was also posted at GEI Investing) and will analyze the Miami market in the next issue due out this week.
Jurow says the Florida real estate market has years of sales inventory in the combined total of the foreclosure pipeline plus the underwater mortgages still to enter the foreclosure and short sale process.
In an interview by GEI News, Jurow said: "Talk of a housing market bottom is nonsense. There is no turnaround in sight for any major metro -- not even the DC market. Clear Capital's latest report shows this pretty clearly. Get ready for things to start looking ugly."
Jurow told GEI News that "older all-cash buyers have actually kept markets like Las Vegas, Phoenix, Miami and most of Florida from collapsing. They are being lured into these markets because of the terrible interest rates they're now getting on their hard-earned savings. Most of them have no idea of the risks they are taking with their capital." Jurow's article on the all-cash buyers can be reached at Minyanville in a few days.