Peak Theories Research LLC
is an on-line research firm dedicated to providing investors with a macro long-term view onthe financial markets and the economy.
Please see important disclosure statements at the end of this document.
June 16, 2010
Abigail F. Doolittleabigail@peaktheories.com518-391-9313
Pointed Commentary on the Primary Financial Market Trend
A Peak Point
The Bet’s Still On
Back in February, I wrote about a $2 bet I’ve had with a colleague since last spring on the state of the housing market. My side:residential housing had further to fall. His side: the worst was behind us.We spoke the other day and I told him to start saving:
the housing market is about to take another tumble
The highly esteemed
National Price Index
in Q1:10 from Q4:09 for the second quarterly decline in a row,perhaps a
near-term inflection point
worth noting, and it remains
. To the positive, the index did show a2% improvement on a year-over-year basis.As is always the case, the chart shows us the story and, in this case, it is not a very good story.
Source: Standard & Poor’s and Fiserv
The official comments to accompany the May 25 release were subdued at best.“The housing market may be in better shape than this time last year; but, when you look at recent trends there are
signs of somerenewed weakening in home prices
,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “Now that the taxincentive ended on April 30th, we don’t expect to see a boost in relative demand.”In addition,
out of the
Federal Housing Finance Agency (FHFA)
March CSI data
. Specifically, theFHFA’s seasonally-adjusted purchase only index declined 1.9% in Q1:10 from Q4:09 while also showing a 3% decline year-over-yearwhile the Zillow Home Value Index showed that home prices were down 1% and 3.8% on a quarterly and year-over-year basis,respectively.Overall,
recent pricing trends
and this is troubling given that those trends reflect thegovernment’s stimulus programs. What will happen without that price propping?