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zugzwang

Us House Prices Roll Over (Again) In Just One Chart

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US-Home-Prices-Atlanta-Fed_2002-2014.png

The chart by the Atlanta Fed overlays three of the major real estate data series – the Federal Housing Finance Agency’s House Price Index, the CoreLogic National House Price Index, and the S&P/Case Shiller Home Price Index (20-city).

And one thing is now abundantly clear:

Year over year, home-price increases are fading from crazy double digit gains last year toward….?

Note the great housing bubble that the Greenspan Fed instigated with its cheap-money policies that then led to the financial crisis. It was followed by a hangover.

And the show repeats itself:

The ephemeral bump in home prices in 2010 and 2011 was a result of federal and state stimulus money for home buyers. It was followed by a hangover.

The hefty home price increases of 2012 and 2013 were nourished by investors, including large Wall Street firms with access to nearly free money that QE and ZIRP made available to them. They plowed billions every month into the buy-to-rent scheme. When prices soared past where it made sense for them, they pulled back. And now the hangover has set in.

There is no instance in recent history when home prices soared like this beyond the reach of actual home buyers, then landed softly on a plateau to somehow let incomes catch up with them. Despite the well-honed assurances by the industry, there is no plateau when home prices are inflated by outside forces. When these forces peter out, the hangover sets in.

http://wolfstreet.com/2014/10/02/us-home-prices-roll-over-in-one-chart/

Edited by zugzwang

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http://mhanson.com/archives/1594

Mark Hanson from April 2014

'I am not calling for another house price crash even though I think that housing is back in a bubble based on the monthly payment comparisons between now and 2006. What I am saying is that housing runs a real risk of price downside if the new-era investors — that have largely supported the entire sector and run up house prices beyond the reach of the average end-user through cheap and easy liquidity over the past three years — take their balls and bats and go home.'

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Are you saying they're not?

I have looked closely at the above chart and I can definitely say, without a shadow of a doubt, that prices in the US are still rising, abide at a slower rate. Let me know when the wiggly lines go under the big thick '0' line and I will cast my technical eye over the chart again! :P

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I have looked closely at the above chart and I can definitely say, without a shadow of a doubt, that prices in the US are still rising, abide at a slower rate. Let me know when the wiggly lines go under the big thick '0' line and I will cast my technical eye over the chart again! :P

July numbers/trends for New York (3.8%), Washington (3.8%), Charlotte (3.6%) and Cleveland (0.9%) suggest that this may already be the case. B)

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US-Home-Prices-Atlanta-Fed_2002-2014.png

OK in the last decade, the last two times that the chart started to point downwards, the result was that growth went into negative territory. Past performance doesn't necessarily point to future performance. Perhaps a 50 year chart might be better, but that might mess up the author of the articles narrative...

Edited by 200p

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OK in the last decade, the last two times that the chart started to point downwards, the result was that growth went into negative territory. Past performance doesn't necessarily point to future performance. Perhaps a 50 year chart might be better, but that might mess up the author of the articles narrative...

In fact, a 100+yr chart corroborates the article's narrative exquisitely.

2011-Case-SHiller-updated.png

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Well they create demand by providing cheap loans, that demand is absorbed, then no more demand until you do something else.

Presumably in the UK it is different because so few houses are coming on the market. Demand is driven by govt schemes and cash rich buyers.

The only way out is inflation busting pay rises. Or build more houses followed by a crash.

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So they're rising, but at a slower rate.Uh huh.

Its a bit like the Ebola stats.

currently the infection v death ratio is falling.

Is that because A people are not dying so much

or B the exponential infection rate is increasing over the time to die rate.

In other words, last week another 1000 were infects, but only 500 more died.

Next week another 1500 are infected, but the dying are from before the extra 1000 from last week died. or, in an exponential growth in cases, new cases will move away from deaths until such time as the peak is reached, whereupon, the death rate will go ballistic for 4 weeks.

Hence, a falling as shown in the graph, is a sign of an already crashing market...it just doesnt look dead yet on paper.

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