Wednesday, July 1, 2009

Latest Case Shiller Index Falls 18%

The Index for April, reported June 30, 2009.

Click for larger image in new window.

Barry Ritholtz Big Pictures the numbers:
"The reduced collapse speed (another one of those famed 2nd derivatives) is primarily a function of foreclosure moratoriums. The overall trend in housing remains weak, with soft demand, excess inventory and heavily indebted consumer unlikely to effect a V-recovery."

And Business Insider's Henry Blodget continues his "Homeowner Hallucination" theme, asserting that $1M McMansions are the next sector to fall:

"Even after a 30% fall from the peak, house prices are still too high. Meanwhile, millions of homeowners are losing their jobs, consumers are still saddled with truckloads of debt, banks are still tightening credit, foreclosures and delinquencies are still soaring, mortgage-mods are a failure, there are still too many houses on the market, wages are declining, taxes are likely to go up, and the economy is likely to struggle for years."

The Index's Robert Shiller suggests that the rate of pricing declines may be stabilizing, but “I am not optimistic that we’re going to see any sharp rebound.”

Related Reading:
Realty Fervor Takes Aim at Reality - Bill Fleckenstein, MSM
Next Segment of the Housing Market to Crash: $1M McMansions - Business Insider
Prime Loan Delinquencies Double; Foreclosure Filings Top 300,000 for 3rd Straight Month
June Economic Summary in Graphs - Calculated Risk
Is the Housing Recovery Stalling? - Video - MSNBC - NAR's Lawrence Yun & UCBerkeley Housing Pundit Rosen Discuss


peptic skeptic said...

Foreclosures, REO, and short sales will only exacerbate the problem here. Recently read an article where it stated that folks who CAN pay their mortgage CHOSE NOT TO. This trend is GROWING among the more well educated, as well as the under 35 and over 65 age groups. While I do not agree with it, it does seem to be gathering steam. This will only add to the glut of unsold homes, further dragging prices down.

Real C'ville - The Bubble Blog said...

It's termed "strategic" foreclosure. When the debtor can pay but the mortgage is underwater and it makes more financial sense to walk away: