- by New Deal democrat
I'll have a lot more to say on housing prices hopefully tomorrow, but I wanted to point out one important but overlooked detail in the Case-Shiller index: the number of cities that have hit bottom keeps increasing. UPDATE: On a seasonally adjusted basis, both the Composite 10 and 20 city indexes rose slightly from January to February. With the exception of April 2011, this is the sole monthly increase since the end of the $8000 housing credit.
In today's report, only 7 of the 20 metropolitan areas made new lows on a seasonally adjusted basis. Six of the 13 metro areas showing seasonally adjusted gains in this month's report bounced off a low set just last month, so it could be noise. But once the price increases two or more months, there is more confidence that the corner has been turned.
Here is the number of cities that have already hit bottom in each monthly 20 city Case-Shiller report since last June:
June 2011 - 1
July 2011 - 2
Aug 2011 - 3
Sept 2011 - 3
Oct 2011 - 4
Nov 2011 - 6
Dec 2011 - 7
Jan 2012 - 13
Presumably some of the 6 cities that bounced off their January lows this month will resume their decline - but on the other hand, not all of them. In short, the trend the Case-Shiller index may have bottomed in January! Failing that, the trend is for it to make an overall bottom within a few months. I would venture by the end of summer.
P.S.: Here's how I counted 7, not 9, cities as indicated in the S&P release (and the cities I found were Los Angeles, Atlanta, Chicago, Boston, Detroit, New York, and Cleveland). The link to the report is here. Now click on "February 2012" in the "seasonally adjusted" column.
Update: Almost everybody else is focusing on the language that "The 10- and 20-city composites were each down 0.8% in February from a month earlier, and fell 3.6% and 3.5% respectively from the year-ago period." This is non-seasonally-adjusted data. Today's reporting by most media is a prime example of how focusing on YoY data when there is seasonally adjusted available, misses turning points.
P.P.S. Sorry for all the edits. I've been re-reading the report and triple-checking my numbers, so there were a few initial errors. Interesting how the non-seasonal-report is getting all the attention, while the seasonally adjusted report may be the most important in a long time.
