Submitted by Garrick Hileman09.18.2008
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Betting closes on May 31 2009
The U.S. housing market has taken a beating. According to the S&P/Case-Schiller Home Price index, home values in twenty major metropolitan areas have declined by over 18% from their peak in Q2 2006
In the nation’s technology capital, Bay Area* home prices have fallen 26.8% since their peak in May 2006.
The big question is when will single-family home prices stabilize?
Prediction: The Case-Schiller San Francisco metro area index figure will continue to decline through March 2009.
For this prediction to be judged favorably, the Cash-Schiller index figure will need to decline each month from the previous month’s figure through March 2009.
*Note: The Case-Schiller San Francisco metro area includes homes from the following counties: Alameda, Contra Costa, Marin, San Francisco, San Mateo
Let the community decide. Place your bets below.
(Photo credit: Associated Press)
Current Community Consensus 91%Prediction Statistics
| Betting Closes: | May 31 2009 | Current Consensus: | 90.89% | Total Bets: | 97 |
| Today's Change: | 0% | ||||
| Life Time High: | 95.26% | ||||
| Life Time Low: | 29.94% |
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Based on futures contract traded at CMEX, the index will decline through September but will uptick in October or November. Looks like an ROI of about 2-3 months for an unfavorable judgment. Do you trust my analysis? Bet favorable at your peril :)
Wow! Was it what I said that caused the drop of 13%?
Hmm.. home sales up 13.6%! http://www.breitbart.com/article.php?id=D939E5SO0&show_article=1.
Home sales are going up a bit (in some places) as prices fall.
July numbers are out. Down 1.8%
http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_09304...
Moody's just issued a report saying the bottom won't come until 2010:
http://www.cnbc.com/id/26959206
"The U.S. housing market will continue to struggle until at least next summer, according to the Mortgage Bankers Association, which is meeting this week in San Francisco." -- SFGate
Good lord I hope the declines continues, these house prices have ruined San Francisco and turned it into a sick resort for the shallow and empty
Latest report out with August number ... San Francisco led the month-by-month declines at -3.5% with 20 city composite at record decline of -16.6%.
http://www.smartmoney.com/breaking-news/smw/?story=20081028090224
See my first comment on this prediction .....
IMO, we are now within ROI of 1 or 2 months for an unfavorable judgment as monthly decline begins to moderate. Expect to see a monthly decline that is LESS than the previous month decline for September or October numbers. So far, PaperEconomy has been very accurate in its analysis. It shows monthly declines in 2008 including a large dip in August with a reversal beginning with September numbers.
Disclosure: I now have an AGAINST bet for this prediction
How will this translate to the Case-Schiller index? Regardless, it is a sign of bottoming if not recovery.
I'm guessing this doesn't bode well for this prediction to come true.
"The closely watched Standard & Poor's/Case-Shiller 10-City Composite Index plummeted 18.6 percent from a year ago, the steepest decline in 20 years of available data. The 20-city index dropped 17.4 percent, also a record."
That information alone may not present a complete picture. With new housing starts declining, the inventory in market will continue to dwindle as home sales continues to rise significantly. Natural supply and demand dictates that prices will stabilize and will start to reverse its trend. Given that this prediction ends in May (when March data is reported), there are still plenty of time for this to be come true. I am still inclined to believe that October number (reported in December) will buck the declining trend and render this judgment UNFAVORABLE based on this report.
Article from the WSJ on housing prices: http://online.wsj.com/article/SB122764977315457619.html
And the hits just keep on coming...
http://www.businessweek.com/the_thread/techbeat/archives/2008/12/googles...
Although, as noted in either this article or another on this news, the quicker the market heads to the bottom the greater the chance that this prediction fails.
@Garrick, I think you had meant to post that comment on the T-Mobile G1 prediction?
Oops, thanks for the catch, David. Here is the story I meant to post:
http://www.bloomberg.com/apps/news?pid=20601087&sid=azP8gnGVza2U&refer=h...
The latest news "Bay Area home prices still in free fall":
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/12/18/BUFK14QN2S.D...
Case-Schiller uses a specific method to calculate the index. It is not solely based on general home sales. That said, it hurts to be a home owner in the Bay Area the last few months. The article does seem to hint that it is more stabilized than before.
October numbers are out ... -4.18% relative to September.
November and December are going to be horrid, I'm sure. And, everyone is prediction a nasty first calendar quarter for '09 (for the economy in general). I simply fail to see this ending on a positive note for this prediction.
Not sure if brand new cars even depreciate that fast?!
How is THIS technology-related?
More ugly news:
http://finance.yahoo.com/news/Homebuilder-sentiment-index-apf-14117543.h...
Home sales soar as foreclosures drive down prices
Where is the bottom? How much more foreclosure properties are in inventory? According to HomeThinking.com, there are:
167 in Alameda
N/A in Contra Costa
N/A in Marin
725 in San Francisco
308 in San Mateo
Absent of these foreclosure properties, the index is sure to be better on a month-to-month basis.
But how many more foreclosure properties will be added to inventory? Mounting job losses and other foctors will continue to drive home prices lower, imo.
Check out the news on condos:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/01/22/BUCT15FAG1.D...
Nov # are out. -2.98 relative to Oct.
Projection that in 2009 housing will decline another 15.5% and other details about how ugly it is right now:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aOBlBuWQf9ko
The housing bubble expanded in the first few years of the 2000s and it took 6 year to Peak, driven by historically low interest rates and poor lending standards.
The housing boom ended in of 2005 /06. Unlike Sock Markets, Real Estate can not be expected to crash and reach bottom quickly. There has been steady re-valuation. But are we anywhere near the bottom?
The global economy will struggle to cope up with falling industrial and consumer demand for several quarters more. We can not expect Real Estate Market to improve until potential buyers get a feeling of financial security and economic well being which is absent today.
David Nash: http://www.exclusivereal.com
There is a two-month lag until the relevant figures will be published, so this prediction has been extended.
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