Wednesday, Jun 25, 2008
Coming here soon
Times: Fears for US consumption as house prices fall 23%
House prices in the US have fallen by almost 23 per cent over a three-month period and a decline in American consumer confidence is seen as signalling the biggest drop in consumption to occur since 1974.
Wall Street economists described the data as “incredibly awful” and said that the likelihood of the US Federal Reserve raising interest rates is remote.
According to the S&P Case-Shiller house price index, considered the most authoritative gauge of US property values, the price of the average American home fell by 1.4 per cent in April, from March, and fell by 22.8 per cent over a three-month period.
Posted by little professor @ 12:49 AM (718 views) Add Comment
15 Comments
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1. Guffy said...
I am not seeing these percentages - I calculate that the 20 city index has dropped 18% from peak. Maybe I am missing something here - if so, please explain.
2. japanese uncle said...
Coming here soon, in a much more brutal manner.
3. str 2007 said...
What a confusing article, they headline that prices have fallen 23% over a 3 month peiod and further on in the article they say prices fell 1.4% in April which is less than prevoous months of 2% falls.
How does 1.4% and 2% falls in a month by any calculation add up to a 23% fall over 3 months.
How does a journalist working for the times come up with this nonsense.
Either they should learn to add up or learn to write - ideally both. How did this person get a job and who allowed this to be published ?
I can only assume they are trying to say a 23% fall as compared to the same 3 month period last year or the year before that.
4. str 2007 said...
Written by Suzy Jagger in New York.
Hmmm where have I heard that surname before.
''Hello I've come for the journalist job you advertised.''
''What's your name'' ?
''Suzy Jagger''.
''I'll get an office fitted out for you right now''.
''Daddy Daddy I've got a job as a journalist for the times'',
''Well done I knew you could do it, was it a difficult interview process'' ?
''Oh yes, one of the hardest things I've ever had to go through''.
5. sold 2 rent 1 said...
http://www.forbes.com/afxnewslimited/feeds/afx/2008/06/24/afx5147235.html
The S&P/Case-Shiller 20-city home price index fell a record 15.3 pct to 169.85 for the year through April, the 16th-straight month of yearly price declines. The 10-city index fell even further, declining a record 16.3 pct to 183.15.
6. sold 2 rent 1 said...
I think she meant to say "and tumbled by 22.8 per cent over a three-YEAR period"
7. little professor said...
What an idiot.
8. mark wadsworth said...
Thanks S2R1, that makes sense now.
9. uncle tom said...
OK guys, a quick lesson on US stats.
The Americans love to 'annualise' their data, which in crude terms means taking a statistic covering a 3 month period and then multiplying it by four to get an 'annual' figure.
So for 22.8% read 5.7% over three months.
It's a daft habit - but it's what they've got used to
10. harold said...
Thanks UT.
11. str 2007 said...
s2r1
22.8% over 3 years.
I think we've reasonably accepted that US is crashing harder than uk (at present at least).
If it's 22.8% over 3 years there, it doesn't bode well for our 25-30% falls here by the end of next year.
12. str 2007 said...
Sorry, my post at 10 was added a bit late, got half way through and distracted.
So UT they think 22.8% over a year based on the last 1/4.
And 15.3% year on year over the last year - actual figure.
So taking the figure for the last 1/4 it shows the rate of falls are accelerating.
If that 's correct, then that is more like the figure I would expect.
For anyone interested here's the wiki link to the case shiller list.
It says Q2 2006 was peak at 189.94 (I assume they mean 000 dollars) so currently off just over 16% from peak.
13. wiltshire said...
Whatever the true figures are I would LOVE to know what discussions are really taking place in VI boardrooms across this country. Despite what they may say in public they KNOW what is really around the corner. Those executive washroom cleaners must be working overtime!!!!!
14. uncle tom said...
That Wiki entry for Case-Shiller is pathetic - access the data through the Standard and Poors site - here is the link to the latest release:
http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_History_062418.xls
The pace of decline is not obviously accelerating, and may even be slowing, but we need a few months more data before drawing conclusions
15. str 2007 said...
UT
Pathetic seems a little strong.
The cities in the list you've posted seem to have a higher peak and trough 206.52 July 2006 down to 169.85 April 2008 representing about a 17.8% fall so far.
You're right the fall March - April isn't as big as the fall February - March 2008 1.4% as against just over 2%. But is that due to April buying season ?
They are currently back to August 2004 prices.