2011 is here and it seems the big question in the housing market is whether it will get more bad or less worse. We've been pretty darn good with our crystal ball (aka: real-time active market leading indicators) over the past few years (click to enlarge images):
Month-over-Month % Change: Altos 20-City Composite vs. Case-Shiller SPCS20
Spring '08: Asking Price changes (blue line) peaked barely above 0% in April '08 before turning lower. The S&P/Case-Shiller (red line) never moved into positive ground for the year, with a 2008 peak value of 167.78, reported in September '08.
Spring '09: Asking Price changes bottomed in January, peaked in May '09, then turned lower again. The S&P/Case-Shiller peaked in September '09 at 146.63, reported in November '09.
Spring '10: Asking Price changes bottomed again in January, peaked again in May '10 (in a market with low inventory), then turned lower. The S&P/Case-Shiller peaked in July '10 at 148.91, reported in September '10.
Spring '11?: Well... Asking Price changes are still moving lower as of last week (the extension the blue line above). The Altos 20-City Composite continues to show strong negative momentum going into 2011:
Altos 20-City Composite: Active Market Prices (90-day rolling average)
Still no inflection yet, but we're sure it's coming at some point in the early Spring - it always does. It's just a matter of whether we get a strong upward jump like in 2009, or the weak shelf like in 2008. The lower these active market price measurements go, the bigger the hole the market is digging going into 2011. Couple this with rising inventory and the other housing supply problem, and you get further affirmation of a weak 2011 market. Sorry...
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
No comments:
Post a Comment