Get Blog Updates on your iGoogle homepage:
| Futures Portend Further Declines |
| Written by Jonathan Smoke | |
| 08.29.2007 | |
|
Discuss this article on the forums. (0 posts) With the release of the of the June Standard&Poor’s/Case-Shiller price index yesterday, most of the housing headlines today are focusing on the price declines revealed in the lagged index. The company reported negative annual returns in their U.S. National Home Price Index, 10-City Composite and 20-City Composite, as well as 15 of the 20 metro area indices covered when comparing June 2007 with June 2006. The quote from the report getting most of the ink today was this attention-grabber: “The pullback in the U.S. residential real estate market is showing no signs of slowing down,” says Robert J. Shiller, Chief Economist at MacroMarkets LLC. “The year-over-year decline reported in the 2nd quarter of 2007 for the National Home Price Index is the lowest point in its reported history, which dates back to January 1987. On a regional level 17 of the 20 metro areas are showing declines in their annual growth rate from what was reported in May.”
A little more comforting was the fact that half of the twenty markets covered showed improvement or no decline in prices when comparing June transactions to May transactions.Even though fear sells news, at least a few papers are reporting that the sky is not falling as severely everywhere. An article in today’s Los Angeles Times contained some good advice for most consumers: “We're getting different pictures as to how dire things are,” said Raphael Bostic, an economist and USC professor. “I think the general picture says that things aren't great, but that the sky hasn't fallen in quite yet, certainly not in Southern California.” The majority of Southland homeowners, he said, should be more concerned with economic fundamentals, such as whether there is job growth in the region, than monthly or quarterly swings in real estate trends.
You don’t have to be an average homeowner to be spooked by all of the negative news. The exclamation mark on the overall market’s negative view of the future was delivered to me today courtesy of the weekly TFS Housing Metric Report from TFS Derivatives Corp. “These short-term fluctuations, while significant, won't touch people on a day-to-day basis,” Bostic said. “For the average homeowner, if you're not looking to sell, try as much as you can to not think about this stuff.” )) Click on image for larger view The chart above from the TFS Housing Metric Report plots the difference between the latest S&P/Case-Shiller index value for the 10 markets traded on the CME against the value of the one year forward CME future from August 2006 to August 2007. The view turned decidedly negative this month, especially in Las Vegas and Miami.
Maybe it’s the heat. 
We're always looking for feedback from our readers.
|
| < Prev | Next > |
|---|
