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Home prices fall further in May, Case-Shiller says. Boston d

 
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Joined: 14 Jul 2007
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Location: Greater Boston

PostPosted: Tue Jul 31, 2007 4:34 pm GMT    Post subject: Home prices fall further in May, Case-Shiller says. Boston d Reply with quote

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Description: Home prices fall further in May, Case-Shiller says. Boston down 4.3% YOY. MarketWatch: "Boston may have bottomed"
URL: http://www.marketwatch.com/news/story/home-prices-off-28-case-shiller/story.aspx ...truncated...
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PostPosted: Tue Jul 31, 2007 4:53 pm GMT    Post subject: Reply with quote

It seems that MarketWatch is basing their statement that "Boston may have bottomed" on the S&P/CSI increases from March to April and April to May. That's just sloppy. A seasonal month-to-month increase in prices is very common in the spring. It happened last year as well and obviously did not signal a bottom then. The more relevant year-over-year change for Boston is notably down by 4.3%, and that is without adjusting for inflation.

Furthermore, futures on the index are still predicting further declines as far ahead as they look, doubly contradicting the prediction of a bottom. With that said, the closest contract (to be settled in August) is up about 3.4% today, so the decline announced today may not have been as deep as expected. Keep an eye on the more distant contracts at the close of trading today to see if the longer term outlook has changed much. (Unfortunately, they only go a year into the future, so they aren't particularly long term, but it's better than nothing.)

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PostPosted: Tue Jul 31, 2007 5:01 pm GMT    Post subject: Reply with quote

It looks like The Globe was a little more insightful than MarketWatch on this:

http://www.boston.com/realestate/news/blogs/renow/2007/07/an_ignominious.html

They also pointed to the official data:

http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_May1235.pdf

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PostPosted: Tue Jul 31, 2007 9:06 pm GMT    Post subject: Reply with quote

It looks like the increase in the August 2007 contract from this morning was short lived. The contract ended the day up 0.4% rather than the originally noted 3.4%. That was quite the unusual swing on the chart. The November 2007 and February 2008 contracts were up a little as well, but the increase tapers off the further out you go, and there was no change to the May 2008 contract, with is the farthest looking one.

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JCK



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PostPosted: Wed Aug 01, 2007 3:57 pm GMT    Post subject: Reply with quote

Hey admin,

Any idea what type of volume these futures are trading at?

It's great to see a market based "prediction" of where housing will end up, but I wonder if the volumes of these things traded are significant enough...
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PostPosted: Wed Aug 01, 2007 4:35 pm GMT    Post subject: Reply with quote

JCK wrote:
Hey admin,

Any idea what type of volume these futures are trading at?

It's great to see a market based "prediction" of where housing will end up, but I wonder if the volumes of these things traded are significant enough...


JCK,

If you follow the FutureSource link and click on one of the individual contracts, you should see some customization options at the bottom which let you add volume to the chart. It is indeed anemic right now. I fully expect that there are some inefficiencies, maybe even enough to make some cash off of. However, I still think the futures are several orders of magnitude more reliable and trustworthy than "forecasts" from the NAR/MAR.

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