Morning Report – Case-Schiller 03/26/13

Posted on March 26, 2013 by Brent Nyitray

Vital Statistics:

  Last Change Percent
S&P Futures  1550.2 3.3 0.21%
Eurostoxx Index 2637.9 -11.4 -0.43%
Oil (WTI) 95.58 0.8 0.81%
LIBOR 0.284 0.001 0.18%
US Dollar Index (DXY) 82.87 0.039 0.05%
10 Year Govt Bond Yield 1.93% 0.01%  
RPX Composite Real Estate Index 191 0.2  

Markets are higher this morning after a positive durable goods report, which showed orders increased 5.7% in Feb. January was revised higher.  Bonds and MBS are down small.

The S&P / Case-Schiller index of home values increased 8.1% YOY , better than the 7.9% estimate. The month on month index rose as well.  For the first time since the housing bust, we have not seen a seasonal drop in house prices.  The New York MSA finally reported positive returns. House prices are back to their Autumn 2003 levels.

CoreLogic reported that shadow inventory (the number of homes that are seriously delinquent, in foreclosure, or REO, but not listed on the MLS) is down 28% from its peak three years ago when it stood at  3 million units. The current 2.2 MM units is down 18% from last year and represents 9 month supply.FL, NY, CA, NJ, and IL account for half of the shadow inventory. 

The Cyprus rescue, while small in actual dollar terms, may have reverberations all across the euro zone. Under the rescue plan, senior Cypriot bond holders will take haircuts and uninsured depositors will be wiped out. This sets a precedent – that all stakeholders can be targeted – which will probably cause even bigger outflows the next time another Euro country gets in trouble. Given that Cyprus instituted capital controls so that investors can’t take money out means that the exit door will be very narrow the next time someone gets in trouble.

Filed under: Morning Report |

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24 Responses

  1. lmsinca, on March 26, 2013 at 7:49 am said:

    That Case-Schiller chart is still pretty depressing.

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  2. Brent Nyitray, on March 26, 2013 at 7:53 am said:

    That Case-Schiller chart is still pretty depressing.

    The fact that house prices haven’t dropped at all this winter bodes well for the summer selling season.

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  3. lmsinca, on March 26, 2013 at 8:08 am said:

    At least we’re moving in the right direction. I’m more interested in the durable goods report as I think it shows more of an improvement for us business-wise. This is the stuff I care about regarding economics not derivatives, HFT, or any of the more esoteric financial products that I really don’t and never will understand. Thanks for your continuing reports on this stuff. I don’t follow them every day but still appreciate your efforts.

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  5. jnc4p, on March 26, 2013 at 8:39 am said:

    “Ditching a three-year-old policy of protecting senior bondholders and large depositors, over €100,000, in banks, Mr Dijsselbloem argued that the lack of market contagion surrounding Cyprus showed that private investors could now be hit to pay for bad banking debts. “

    This is a good thing and what should have happened from the start.

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  6. jnc4p, on March 26, 2013 at 8:40 am said:

    “lmsinca, on March 26, 2013 at 7:49 am said:

    That Case-Schiller chart is still pretty depressing.”

    I would be more concerned if there were signs of the bubble re-inflating.

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  7. Troll McWingnut or George, whichever, on March 26, 2013 at 9:02 am said:

    “I would be more concerned if there were signs of the bubble re-inflating.”

    Home builders all around Houston are advertising 0 down home loans.

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  8. lmsinca, on March 26, 2013 at 9:04 am said:

    jnc, judging by the numbers here in CA, there’s no danger of re-inflation in the short term anyway. I’m more interested in business to business numbers anyway at this point. We personally have a pretty small window of opportunity to make up some of our lost ground.

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  9. Brent Nyitray, on March 26, 2013 at 9:23 am said:

    Bubbles are psychologically driven – in 2006 everybody thought real estate was a one-way bet and prices couldn’t drop, at least on a national level.

    This generation probably will never see another bubble in stocks or real estate. Our kids may see one in equities again. Our grandkids may see one in real estate again.

    Of course the bond bubble has yet to burst, and that one’s going to leave a mark..

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  11. Kevin S. Willis, on March 26, 2013 at 1:49 pm said:

    @Troll: “I’d heard that Science was about Truth?”

    Well, it is, but science is full of human beings, and the science press is really full of human beings, with all their biases and failings and prejudices. Stephen Jay Gould often made the point that science is messy, and that scientists are far from infallible, and can be as dogmatic and immune to facts and new information as anybody in any field. Especially where their darlings are concerned.

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  12. Kevin S. Willis, on March 26, 2013 at 2:16 pm said:

    I’m gonna try to pop in now and again. It’s frustrating, because I pose a reply or two and then the filter we use just auto-blocks the URL for the article so I have to work around it or . . . trying to keep hitting it via https://, since the site is blocked here for http:// . . . as long as it keeps with the https://, it seems to work (thank goodness for wordpress: lotsa blog sites don’t feed on the https). Trying to be more frequent. Not every day though. School merger is a very busy thing and will spend most of my time trying to (like a good government workers) preserve my job in the face of elimination of redundancies and budget cuts. Give I’m in the (totally objective, here) more efficient and effect county schools system, but the bigger, less efficient urban city school system has most of the power and influence . . . who knows what will happen.

    What’s going on seems to change every day. We hear one thing and then next week it’s different. Anyway, it been preoccupying.

    The great, already-here superintendent of the county schools asked for and got a pricey buyout of his contract, as it was clear the school board intends to replace him with a showboater who “wins” a national candidate search for superintendent of the consolidated school system. So he’s gone. Lots of the good folks in the county are vacating ahead of being supplanted by Memphis City, even though MCS has historically performed very poorly, and Shelby County Schools has historically performed extremely well.

    Also accompanies necessary budget cuts. Which is going to cut resources and result in layoffs. Has to be done (as property taxes are dropping, because property assessments are lower) but still, it’s not fun to be in the middle of it. While I intellectually understand why a great system that did a great job serving the children it was educating has to be hobbled so it does a much suckier job at serving the children it is presently educating (that is, money does not grow on trees), it’s no fun to participate in the process. Or be a likely future casualty of it.

    Although it only half has to be hobbled. The budget cuts were coming anyway—the unnecessary merging of the two systems so that a huge amount of the budget has to be devoted to the process of merging was just the result of politicians and school board members being idiots.

    If you’d like to know more about merging of our two school systems, feel free to read here:

    http://www.commercialappeal.com/news/local/school-merger/

    http://www.commercialappeal.com/schools-in-transition/

    http://www.memphisdailynews.com/news/2013/jan/12/making-sense-of-the-merger/

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  13. Kevin S. Willis, on March 26, 2013 at 3:24 pm said:

    ScottC: That makes two of us! Hope all is well with you and yours, BTW.

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    • ScottC, on March 26, 2013 at 4:02 pm said:

      Thanks. We are doing OK. A disappointment or two, but in the overall scheme of things, looking around it’s tough to complain.

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  14. lmsinca, on March 26, 2013 at 4:14 pm said:

    Hi kevin, good luck with the changes. I hope your job and security withstand the merger. My cousin, a beloved teacher at a really tough inner city high school in Los Angeles didn’t survive some of those cuts but landed a job at an upscale new intermediate school. He hates it but will be retiring soon so took what he could get. I hope you fare much better than that. I have the feeling that your talents are probably essential but it’s a matter of the correct people realizing it.

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  15. lmsinca, on March 26, 2013 at 6:58 pm said:

    I’ve enjoyed all the discussions today everywhere regarding marriage equality. It’s very heartening to realize that attitudes are changing and equality is really only a matter of time.

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  16. novahockey, on March 27, 2013 at 7:33 am said:

    Hi LMS … here’s a few links on the marriage issue from the wacko bird contingent.

    http://reason.com/blog/2013/03/27/the-defense-of-marriage-act-on-trial

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  17. lmsinca, on March 27, 2013 at 7:44 am said:

    Thanks Nova, I’ll check all the links out today. I wasn’t unhappy with the arguments yesterday and even a narrow or no standing ruling on Prop 8 will support the courts here and give other states some added muscle. I’m more interested in DOMA so those links will give me something to read today, I assume from the libertarian perspective.

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  18. geaniet, on March 27, 2013 at 7:52 am said:

    Good Morning Everyone,

    I have 2 things this morning:

    1) HOW DO I CHANGE MY AVATAR?

    2) My husband and I just did a refi on our VA mortgage.. YAY… but, while we waiting to close I picked up the March 2013 issue of Time. It was completely dedicated to why healthcare in the U.S. is so high. In summary, Stephen Brill states, is due to the “chargemaster” hospitals use. I read the entire article and learned a LOT, and was extremely frustrated. It seems to me he hit the nail on the head. I don’t know if I missed an existing discussion on this article or not, so, if I did, can one of you please send me the discussion link. If not, I would like to hear back from any of you who also read the article, with your take on the article.

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  19. novahockey, on March 27, 2013 at 8:10 am said:

    genie — you need a gravatar account. i think.
    http://en.gravatar.com/

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  20. geaniet, on March 27, 2013 at 8:49 am said:

    Thank You Nova !! I had no idea that site even existed.

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Be kind, show respect, and all will be right with the world.