RE and economic charts: CR's = Case Shiller: Home Prices increased Seasonally in Aug + Real House Prices and House Price-to-Rent

Tuesday, October 25, 2011

CR's = Case Shiller: Home Prices increased Seasonally in Aug + Real House Prices and House Price-to-Rent

[mEDITate-OR:

assume that what you see, at first, is all there is to see...

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When we compare the first 2 charts, we see that we have been essentially flat since the 2nd Q of 2009, and that the 5% gain we saw is now gone. We have argued that this is an "L" shaped recovery. These CR charts appear to support that. So, the "end of the recession" simply did not happen - not for jobs, not for housing.

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When we compare the next 2 charts, we see the effects of inflation. Nominally, we might think that we did see an increase in home values, BUT, and this is a big one, when we look at the "real" numbers - both as a pun and as inflation adjusted - we see that we have been falling all the time.

Very starkly, THAT chart shows U.S. that there never was any end to the recession - in housing.

Nada, nyet, Zed, zero - what part of no do they not understand?

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The last chart shows U.S. that while it may BE better now to buy than rent...

what that does NOT show you is:

The Fact that you probably cannot afford to buy

and even if you can, you probably cannot get a loan.

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Significant comments by Bill @ CR
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An update: Case-Shiller, CoreLogic and others report nominal house prices.

However it is also useful to look at house prices in real terms (adjusted for inflation),

as a price-to-rent ratio, and also price-to-income (not shown here).

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The small increase reported by S&P was seasonal.

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In nominal terms, the Case-Shiller National index is back to Q4 2002 levels, the Case-Shiller Composite 20 Index (SA) is back to June 2003 levels, and the CoreLogic index is back to July 2003.

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In real terms, the National index is back to Q3 1999 levels, the Composite 20 index is back to July 2000, and the CoreLogic index back to June 2000.