Forum Index
Boston Bubble - Boston Real Estate Analysis
 FAQFAQ   SearchSearch   MemberlistMemberlist   UsergroupsUsergroups   RegisterRegister 
 ProfileProfile   Log in to check your private messagesLog in to check your private messages   Log inLog in 

Go to: Boston real estate bubble fact list with references
More Boston Bubble News...
DISCLAIMER: The information provided on this website and in the associated forums comes with ABSOLUTELY NO WARRANTY, expressed or implied. You assume all risk for your own use of the information provided as the accuracy of the information is in no way guaranteed. As always, cross check information that you would deem useful against multiple, reliable, independent resources. The opinions expressed belong to the individual authors and not necessarily to other parties.

S&P/Case-Shiller Boston Snapshot Q3 2007

Post new topic   Reply to topic Forum Index -> Greater Boston Real Estate & Beyond
View previous topic :: View next topic  
Author Message
Site Admin

Joined: 14 Jul 2005
Posts: 1823
Location: Greater Boston

PostPosted: Wed Nov 28, 2007 3:28 pm GMT    Post subject: S&P/Case-Shiller Boston Snapshot Q3 2007 Reply with quote

Yesterday, Standard & Poor's released the S&P/Case-Shiller housing price index data for September 2007. Boston prices fell 3.2% from one year earlier, in nominal terms, as previously reported (Info/Broken?).

The November 2007 futures contracts for the index, which covers prices in the third quarter, were also settled yesterday. When the extended S&P/Case-Shiller futures were first introduced, Mike suggested that somebody archive the predictions of the futures contracts, and I proposed that a good time to do that would be each day that a futures contract is settled (i.e., quarterly). This post is an attempt to provide such a time capsule for the future.

Below is a graph of the S&P/Case-Shiller Index for Boston from 1987 through the present (shown in solid purple), with the expected future values added using the values of the futures contracts on the indicated dates:

The long term outlook hasn't changed very much from last month. The market is currently pricing in an additional, nominal decline of 13.31% by 2010, and a 18.88% nominal decline from the peak.

The November 2007 futures contract rose 1.13 points, or 0.67%, yesterday to settle at the reported value of the index for September 2007, which was 170.73. The closing values for all contracts on November 27, 2007 were as follows:

  • Nov '07: 170.73
  • Feb '08: 166.00
  • May '08: 162.40
  • Aug '08: 160.00
  • Nov '08: 160.00
  • Feb '09: 157.60
  • May '09: 155.40
  • Nov '09: 151.00
  • May '10: 148.60
  • Nov '10: 148.00
  • Nov '11: 150.00

Note that the volume on these contracts is currently very sparse, and so using them to predict future housing prices should be viewed as unreliable. However, bear in mind that other sources of predictions are most likely even less reliable, especially organizations like the NAR which have a disincentive for accuracy. The futures markets are probably the least biased predictor available, given that those trading the contracts have a direct financial incentive to be accurate (real money rides on the accuracy).

Also note that the contract values might not necessarily reflect the expected value of the index if there are unaccounted opportunity costs involved. This was discussed in some detail in the original thread when the extended futures debuted. It is my current understanding that both the buyer and seller would have the same opportunity costs (a performance bond and transaction costs), and these costs would therefore offset each other when viewing the value as predictive. This could be wrong, though. If you would like to discuss this point, please read the original thread first since there are some references there to support the assumption of symmetry.

Previous snapshots are available for:

The data used for the above report was obtained from the following sources:

The text of this post and the associated graphs are Copyright 2007 by with all rights reserved, except as stated here. You may reproduce the graph individually or the text of the entire post as a whole (including graph) under the Creative Commons Attribution-NoDerivs 2.5 License. You may additionally scale the graph to fit your work. Alternatively, if you remove the signature from the bottom left hand corner of the image within this post, that modified image (and only that modified image) can then be distributed under the Creative Commons Attribution 2.5 License. In all cases, attribution should be made via a hyperlink to or Quoting excerpts of the text is also allowed provided that the quotes would normally fall under fair use. To request other terms for reproduction, please post your request in the original thread at

- admin
Back to top
View user's profile Send private message Send e-mail Visit poster's website
john p

Joined: 10 Mar 2006
Posts: 1820

PostPosted: Wed Nov 28, 2007 3:42 pm GMT    Post subject: Reply with quote

Alright, I'm playing with this really cool new tool. Obviously, you're looking to see if we have a fray or an alignment at the current tail end. If you see a change like between 9/17 and 10/30 you have to find out what the impetus for the change was.

I see the interest rates dropping significantly at the beginning of October which might have changed the tail end outlook.

It is interesting to note that despite a continued drop in rates between 10/30 and 11/27 you don't see as much of an uplift. I think this is because in early November, rates went up and then down towards mid November.
Back to top
View user's profile Send private message
Display posts from previous:   
Post new topic   Reply to topic Forum Index -> Greater Boston Real Estate & Beyond All times are GMT
Page 1 of 1

Jump to:  
You can post new topics in this forum
You can reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum

Forum posts are owned by the original posters.
Forum boards are Copyright 2005 - present,
Privacy policy in effect.
Powered by phpBB © 2001, 2005 phpBB Group