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A bottom in home prices?

Posted by WARREN MOSLER on March 24th, 2009


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A bottom in home prices?

And with the low created by forced and massive foreclosure liquidation auction sales a V shaped bottom is to be expected.

House Price Index MoM (Jan)

Survey -0.9%
Actual 1.7%
Prior 0.1%
Revised -0.2%

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House Price Index YoY (Jan)

Survey n/a
Actual -6.3%
Prior -8.9%
Revised n/a

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House Price Index ALLX (Jan)

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4 Responses to “A bottom in home prices?”

  1. jcmccutcheon Says:

    So if I’m reading it correctly, the MoM is the biggest upward move in 10 years.

    Reply

  2. zanon Says:

    Warren: I think you’re totally off here. The cheapest houses REO’d first, which sold them at cash flow positive values. Then the next cheapest houses. Now more expensive houses, etc.

    Changes in median price reflect the shift in composition of houses which are actually selling. If it ticks up, it means that more expensive houses are being added to the REO pile. These houses don’t actually sell that far below market price btw — just 6% or so (not the 20% NAR claims). Certainly not correct to interpret this as a bottom in *all* home prices. Cash flow positive rental properties have bottomed, but there is still plenty of more expensive stuff that has not (in my area, CA, $2M homes rent for $2K/mo).

    Reply

    warren mosler Reply:

    good point!

    and it’s only one data point

    Reply

  3. futureshock Says:

    Warren what of all these McMansion suburbs that still have 2 Suv’s parked out front? I thought with the expected rise in fuel prices it will make these surburbs unaffordable for those with a long commute to work?

    Reply

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