Case-Shiller Home Price Index Posts Second Consecutive Monthly Decline, Average Home Prices Back To Fall 2003 Levels

The Case-Shiller Home Price Index is unique among other economic data indicators for recommending that analysts focus solely on its Non-seasonal adjusted data series, as this is what the report uses in its own headline figures. It adds that “for analytical purposes, S&P Dow Jones Indices publishes a seasonally adjusted data set covered in the headline indices” – a far cry from the BLS, whose Arima X 12 models are the basis of the data “moves” on a monthly basis: moves which are based not so much in the underlying data but on the seasonal adjustment and fudging the government employees apply to it. And it is the unadjusted Case Shiller data that showed that in November, the 20 City Composite index posted its second consecutive monthly price decline in a row. Yes: on a year over year basis home prices did rise some 5.5%, but on the other hand, “average home prices across the United States are back to their autumn 2003 levels for both the 10-City and 20-City Composites.” And while the price decline into the year end is somewhat seasonal, it certainly does not fit with all the other economic data released by the government showing a housing picture so bright not even the tiniest drops in prices were allowed.

And in what is the biggest paradox for homebuyers in New York, Case Shiller reported that of the 20 cities tracked, home prices rose everywhere… except New York, yet oddly enough it is in NY that the uber-wealthy from China and Russia come to park their money and buy any $50 million + available duplex, triplex and quadruplex regardless of price, and where the bubble at the ultra expensive end of the market is raging like never before (not to mention the record December Hamptons real estate prices).

Perhaps just as importantly, the bubble is back in the west:

In the 12 months ended in November, prices rose in 19 of the 20 cities and fell in New York. In 19 cities prices rose faster in the 12 months to November than in the 12 months to October; Cleveland prices rose at the same pace in both time periods. Phoenix led with the fastest price rise — up 22.8% in 12 months as it posted its seventh consecutive month of double-digit annual returns.

Keeping it real, Vegas – the biggest housing bubble pop in history, saw home prices rise 10% Y/Y, while Detroit was up 11.9%. One word (Un)sustainable.

But maybe this time it is different.


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