Hot of the Press Release:
New York, June 30, 2015 – S&P Dow Jones Indices today released the latest results for the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices. Data released today for April 2015 show that home prices continued their rise across the country over the last 12 months.
Both Composites and the National index showed slightly lower year-over-year gains compared to last month. The 10-City Composite gained 4.6% year-over-year, while the 20-City Composite gained 4.9% year-over-year. The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a 4.2% annual gain in April 2015 versus a 4.3% increase in March 2015.
Denver and San Francisco reported the highest year-over-year gains with price increases of 10.3% and 10.0%, respectively, over the last 12 months. Dallas reported an 8.8% year-over-year gain to round out the top three cities. Nine cities reported faster price increases in the year ended April 2015 over the year ended March 2015. Las Vegas prices rose 6.3% in the year to April versus 5.7% in the year to March 2015. In 11 cities, however, the rate of annual price gains slowed. Boston home prices were up 1.8% in the 12 months ending in April compared to a 4.6% gain in the 12 months ending in March 2015.
Before seasonal adjustment, the National index increased 1.1% in April and the 10-City and 20-City Composites posted gains of 1.0% and 1.1% month-over-month. After seasonal adjustment, the National index was unchanged; the 10- and 20-city composites were up 0.3% and 0.4%. All 20 cities reported increases in April before seasonal adjustment; after seasonal adjustment, 12 were up and eight were down.
We are always guided by the second chart in the series, which as you can see reveals that housing prices have caught up to autumn 2004 levels.
Or, have they?
You see, the problem which we get into is when we look at the Hooley-gooley way the Fed has been slapping money around and when we consider inflation.
While owning your own home is still the best investment most people will ever make in their lives, there are some asterisks.
The first is that the Fed inflation data reveals that in order for a 2004 $185,000 home to to hold the same intrinsic purchasing power today, thanks to inflation, it would need to be priced around $234,740.
The second problem is that even this is not fully priced, since taxes and M2 money supplies are up, too.
And somewhere in the asterisks, we mention the commission spread.
While the S&P data is the “gold standard” in housing numbers, it is still good to remember your mileage may vary, since real estate commissions, points, origination fees, yada, yada are going to eat your shorts.
But in the end is it still the best savings plan most folks have.
Tiny Dead Cat Bounce Tuesday (TDCBT)
(Tacoma, WA) The “normal” bounce to look for when the market is dropping like a piano off the 10th floor balcony is 50%. Sometimes the Golden Ratio (61.8%) comes into play, too.
But this morning, about all we go into the Housing Data with is a sense that “it ain’t over” on Greece, yet.
So maybe a 1-0.618 = 38.2% bounce, then.
With a midnight deadline fast approaching, we shall see if the sun comes up tomorrow, or not.
Not that it would signify the end of the world. Just some pain for people in high finance who can mostly afford it. And sure, Greece has to eventually pay for the free lunches they have enjoyed for years.
But off in the background, there are some lesser reported events and some of these are encouraging.
For example, the Baltic Dry cargo index, which had been languishing around 600 for several months, has gained 33% which ought to tell you business confidence is crawling out from under the covers.
First thing you know, one of these mornings, we’ll be reporting how our long-forecast return of bond money to equities will have gotten underway and how the Dow just sailed through the 25,000 levels.
Not this morning, though. Today we look for a simple TDCBT (Tiny dead cat bounce Tuesday) and tomorrow, after the deadline passes, we will size things up again.
Our real focus continues to be oriented toward 2017- 2018 because out there, the service economy should begin to auger in. Worry today? No. Worry down the road where a zillion financial cans have been kicked? Hell yeah.
Government Replacing Unions
Once upon a (*historical) time, America had unions. Where did the 490-0hour work week, the two weeks of paid vacation, medical coverage, and so on come from?
Unions don’t exist, as they once did in this country. Mainly because we haven’t figured out how to build unions for regular working people in small business and such.
And unions have been in decline since the corporate takeover of government, too. (Don’t start me on Citizens United or the two corporate-owned parties.)
Still, what used to happen is that when people’s standard of living began to tank, unions would step up with wage and benefit demands.
With the passing of Unions, and their replacement by government, we see now how the Neighborhood Organizer in Chief is planning to drive some wage inflation into the marketplace by adding 5-million workers to those who will be entitled to overtime pay at time and a half.
It’s a good thing and it’s a bad thing.
The good is that a few of the nation’s less well-off will sneak closer to making ends meet.
The bad news is that when the other shoes of Obamacare hit next year, all those gains will disappear and maybe then some.
Still, we continue to see the playbook outlined in Report from Iron Mountain as being played out before us.
One of the ways to hold the country together, forecast the book from the 1970s, would be to set up a massive national healthcare system.
Eventually, even that will fail, but in the meantime, it’s amusing to see how many people don’t get it.
Ebola: It’s Back
A death in Liberia reminds us that the whole world is still just one international jetliner away from global pandemic collapse.
Witchcraft: It’s Back
Think Salem was stupid? As we counsel our kids: “Stupid never goes out of style.”
And to prove it today, here’s how ISIS is now beheading women for “sorcery” rather than burning them at the stake.
Speaking of Stupid
Wal-Mart wouldn’t bake a cake with a Confederate flag on it, but it would back an ISIS cake.
If you are into heavy exercise, the article over here about limiting water intake after hard sweats in order to avoid crashing blood sodium levels is worthy of study.
Me? When I sweat enough to feel it, a dill pickle (high in salt) seems to help. Somehow, may Farman’s Dill and Gatorade diet may not catch on, but I keep searching for that zillion seller diet book, since it seems like the best path to easy millions.
Sysco will not be acquiring US Foods. Too much concentration of power per the gov’t. Apparently, America needs at least two large hamburger helpers. No super-sizing allowed.