Case-Shiller: The Double-Dip Has Arrived

Written By Brian Hicks

Posted February 22, 2011

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According to the latest data from the Case-Shiller Home Price Index, the housing double dip has arrived.

Home values in 20 cities fell 2.4 percent, the biggest year-over-year decrease since December 2009, the group said today in New York.

“We ended 2010 with a weak report,” David Blitzer, chairman of the index committee at S&P, said in a statement. “Despite improvements in the overall economy, housing continues to drift lower and weaker.”

Nationally, home prices decreased 4.1% in the fourth quarter from the same time in 2009 and were down 3.9% from the previous three months. It was the biggest quarter-to-quarter drop in almost two years.

Now with a reading of 130.38, the index is just shy of the low of 129.2 reached in the first quarter of 2009. Those post bubble-lows put home prices generally on par with 2003 values.

Of course, the problem is home prices could easily fall another 10% from here pushing home values all the way back to levels last seen in January 2000.

Meanwhile, in the shocker of a still young century, we learned that the National Association of Realtors (NAR) hasn’t been exactly truthful when it comes to thier relied upon sales data.

As it turns out, the NAR has been lying to the tune of 15-20%,  overestimating home sales going back to 2007. So things are worse than they told us.

Imagine that…

From the Mortgage Rates & Trends Blog by Michael King entitled: Realtor Group Accused Of Over-Counting Homes Sales

The National Association of Realtors might be over-estimating home sales figures. If it has, the real estate bust was even worse than it seemed and current housing markets may be even worse than believed.

The problem is that NAR’s much-followed home sales numbers just don’t jive with figures from other housing market researchers.

CoreLogic, a real estate research firm in Santa Ana., Calif., stated in its U.S. Housing and Mortgage Trends report for this February: “Although it’s been widely reported that the National Association of Realtors’s (NAR) existing home sales data fell only 5% to 4.9 million in 2010, down from 5.2 million in 2009 and flat relative to 2008, the CoreLogic data indicates otherwise.”

CoreLogic estimated 3.6 million home sales in 2010, a 12 percent decrease from 4.1 million in 2009.

The report goes on: “Historically, the CoreLogic existing sales data have covered about 85% to 90% of all NAR’s existing home sales data. However, in 2006 NAR’s sales data became elevated relative to the CoreLogic, MBA, HMDA and Census sales related data, and that trend has continued and become more pronounced through 2010.”

There could be several reasons for the differences, yet NAR’s existing home sales data are overstated by about 15 to 20 percent, it says. Inflated homes sales would mean that demand for homes is smaller and the inventory is larger than thought.”

 

By the way, at the end of last year about 15.7 million mortgaged single-family homes, or 27 percent, were worth less than the amount of loans outstanding, according to Zillow Inc., a Seattle-based real estate information company.

It was the highest share in data going back to the first quarter of 2009.

Like it or not, the housing bulls were wrong.

Related Articles:

Meredith Whitney Predicts a Housing Double-Dip

Matt Taibbi On ForeclosureGate Crimes

Zandi: Expect 8% Home Price Declines

Guidelines Tighten Again For FHA Loans

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