House Price Inflation in U.S. Increases More Than Forecast


By Mark D   Follow   Wed, 26 Dec 2012, 12:47pm   1,146 views   27 comments
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Home prices climbed more than forecast in October, indicating a rebounding real-estate market will bolster the U.S. economy for the first time in seven years.

The S&P/Case-Shiller index of property values in 20 cities increased 4.3 percent from October 2011, the biggest 12-month advance since May 2010, the group said today in New York. The median forecast of 30 economists in a Bloomberg survey projected a 4 percent gain.

Property values will probably keep heading higher as record-low mortgage rates, a growing population and an improving economy spur demand for housing. The turnaround in real estate is buoying household confidence and wealth, one reason why consumer spending is improving even as concern mounts that lawmakers will fail to stave off looming tax increases.

“The housing market is definitely starting to recover,” said Ryan Wang, an economist with HSBC Securities USA Inc. in New York, who’s the second-best forecaster of the S&P/Case- Shiller index over the past two years, according to data compiled by Bloomberg. Higher property values have “added about a trillion dollars to household wealth just since the beginning of this year.”

http://www.bloomberg.com/news/2012-12-26/home-price-gains-accelerate-as-u-s-real-estate-market-rebounds.html

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  1. HousingBoom


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    1   1:06pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    This article reminds me of one of these housing myths in 2006. http://money.cnn.com/2006/08/24/real_estate/pluggedin_tully.fortune/

  2. APOCALYPSEFUCKisShostikovitch


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    2   1:07pm Wed 26 Dec 2012   Share   Quote   Permalink   Like (3)   Dislike  

    I believe everything I read on the Internet about home prices.

  3. Call it Crazy


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    3   1:17pm Wed 26 Dec 2012   Share   Quote   Permalink   Like (2)   Dislike (2)  

    APOCALYPSEFUCK is Shostakovich says

    I believe everything I read on the Internet about home prices.

    Sure.... and based on the OP report above, do you like your statistics "Seasonally Adjusted" or "Not Seasonally Adjusted", because the numbers tell different stories....

    *

  4. Call it Crazy


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    4   1:17pm Wed 26 Dec 2012   Share   Quote   Permalink   Like (1)   Dislike (2)  

    From today's report...

  5. 121212


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    5   1:24pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike (1)  

    I smell a lot of bullshit brewing in the housing market. Bennie wants some movement making mortgages somehow even cheaper! LOL.

    When will they realize it's not an affordability issue in the main, other than places like California, it's a CONFIDENCE ISSUE!

  6. Call it Crazy


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    6   1:28pm Wed 26 Dec 2012   Share   Quote   Permalink   Like (2)   Dislike (1)  

    From the OP:

    ...."Home prices adjusted for seasonal variations rose 0.7 percent in October from the prior month, with 17 of 20 cities showing gains, according to today’s report."

    I'd like to know who does this "seasonal adjusting" and what methodology they use? It seems lately that numbers get "massaged" more than an Asian massage parlor.

  7. 121212


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    7   1:32pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike (2)  

    Call it Crazy says

    I'd like to know who does this "seasonal adjusting" and what methodology they use? It seems lately that numbers get "massaged" more than an Asian massage parlor.

    Come on now, this is nothing new.

    You should see how the Chinese massage there own figures!

  8. Mark D


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    8   2:08pm Wed 26 Dec 2012   Share   Quote   Permalink   Like (1)   Dislike  

    Call it Crazy says

    I'd like to know who does this "seasonal adjusting" and what methodology they use? It seems lately that numbers get "massaged" more than an Asian massage parlor.

    what about whites' obsession for "escort" services, Las Vegas, Reno Nevada, San Fernando Valley as the porn capital of the world, Europe's age of consent as low as 12 (LOL WTF?) and the Catholic church's "adoration" of young boys which you, being a republican, should know about more than I do.

    no one beats whites when it comes to sexual perversion.

  9. Mark D


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    9   3:22pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    121212 says

    You should see how the Chinese massage there own figures!

    the same way the U.S gov has been massaging its CPI?

  10. 121212


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    10   3:24pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike (1)  

    Mark D says

    the same the U.S gov has been massaging its CPI?

    Yeah your right, but we are the world currency reserve so expect the fiddle is on.

    You forget, the USA is about "do as I say" "not do as I do" or god help you!

  11. Mark D


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    11   3:33pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    121212 says

    Mark D says

    the same the U.S gov has been massaging its CPI?

    Yeah your right, but we are the world currency reserve so expect the fiddle is on.

    that's only OK short-term. when another currency replaces the USD, the more US dollars a foreign country has, the more they will contribute to the inflation in the U.S.

  12. 121212


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    12   3:37pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike (1)  

    Mark D says

    that's only OK short-term. when another currency replaces the USD, the more US dollars a foreign country has, the more they will contribute to the inflation in the U.S.

    Hence the 33% devaluation of the Dollar over 20 years, the Fed announced this in February 2012.
    http://www.forbes.com/sites/charleskadlec/2012/02/06/the-federal-reserves-explicit-goal-devalue-the-dollar-33/

  13. Mark D


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    13   3:46pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    121212 says

    Mark D says

    that's only OK short-term. when another currency replaces the USD, the more US dollars a foreign country has, the more they will contribute to the inflation in the U.S.

    Hence the 33% devaluation of the Dollar over 20 years, the Fed announced this in February 2012.

    http://www.forbes.com/sites/charleskadlec/2012/02/06/the-federal-reserves-explicit-goal-devalue-the-dollar-33/

    more reason to buy a house?

  14. everything


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    14   5:35pm Wed 26 Dec 2012   Share   Quote   Permalink   Like (1)   Dislike  

    Interesting how dropping interest rates has added a trillion wealth on paper. That trillion?, that's your inflation. All things being equal, what has changed in the last year?, they are still the same old houses they were a year ago but with different price tags.

    The problem with all this? The fed thinks housing is a capitalist profit based function of the economy when really it's just a roof over your head. With investors monopolizing rents, stagnating wages, the middle and lower classes will continue to be slaughtered to the point where disposable income becomes naught.

    AND .. in a couple of years when it all starts to unwind again, after blowing bubbles, increasing asset prices, which just increases credit, causing spending to get out of control that much faster, etc. the fed will start bailing, making excuses, and we can start the process all over again.

  15. 121212


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    15   5:48pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    Mark D says

    more reason to buy a house?

    Perhaps another in 2015

  16. Mark D


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    16   6:05pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    Call it Crazy says

    From today's report...

    from the same source your graph cited, i found this article which claims housing recovery is SUSTAINED. maybe you need reading glasses.

    "Sustained Recovery in Home Prices
    According to the S&P/Case-Shiller Home Price Indices

    New York, December 26, 2012 – Data through October 2012, released today by S&P Dow Jones Indices for
    its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, showed home prices rose
    4.3% in the 12 months ending in October in the 20-City Composite, out-distancing analysts’ forecasts.

    http://www.standardandpoors.com/indices/articles/en/us/?articleType=PDF&assetID=1245345601476

  17. Kevin


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    17   6:08pm Wed 26 Dec 2012   Share   Quote   Permalink   Like (1)   Dislike  

    HousingBoom says

    This article reminds me of one of these housing myths in 2006. http://money.cnn.com/2006/08/24/real_estate/pluggedin_tully.fortune/

    My favorite line:

    "Today, real 10-year rates are still extremely low. They have nowhere to go but up. When the one-time gain of 2001-2004 reverses, housing prices could take a further hit."

    (this was in 2006, when rates were 6-7%)

    Mark D says

    that's only OK short-term. when another currency replaces the USD, the more US dollars a foreign country has, the more they will contribute to the inflation in the U.S.

    No other currency will replace the USD as the reserve currency during our lifetimes. There are only three candidates, and they're all fantasy land bullshit:

    - Euro: Not going to happen after that clusterfuck of a debt debacle. This currency probably won't even exist in 20 years.

    - RMB: The probability of wealthy countries accepting china as the world's reserve is exactly zero. The only countries who want this are China and its dictatorship allies.

    - "Basket of currencies": Pure academic masturbation fantasy. It's a theoretical instrument and not something that you can actually plan for, and every time it's brought up people who actually deal with these issues just smile and nod.

  18. Call it Crazy


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    18   6:14pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    Mark D says

    from the same source your graph cited, i found this article which claims housing recovery is SUSTAINED. maybe you need reading glasses.

    Speaking of reading, go look at the chart I posted. Take a look at the bottom numbers in the Sept./Aug NSA vs SA.. they are close.

    Now, look at the bottom number on Oct./Sept. NSA vs SA... bigger spread..

    So.... if the same methodology is used each month, why the differences?

    So, how come bigger differences?? Massaging???? Then, the MSM use the "massaged" numbers for their headlines...

  19. Mark D


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    19   7:31pm Wed 26 Dec 2012   Share   Quote   Permalink   Like (2)   Dislike  

    Call it Crazy says

    Now, look at the bottom number on Oct./Sept. NSA vs SA... bigger spread..

    So.... if the same methodology is used each month, why the differences?

    first, Logic 101: you cannot attack the credibility of a source (faulty methodology) and at the same time cite it to support another argument (there is a difference in the spreads). this is faulty logic.

    in other words, if don't trust the source, how do you know the difference in the spreads is even real?

    second, the spread is bigger in Oct/Sept data because the typical rate of purchases in Oct is lower than that of September and September's rate is lower is than that of Augusts. let me know if you need help understanding this.

  20. Call it Crazy


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    20   8:06pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    Mark D says

    in other words, if don't trust the source, how do you know the difference in the spreads is even real?

    second, the spread is bigger in Oct/Sept data because the typical rate of purchases in Oct is lower than that of September and September's rate is lower is than that of Augusts.

    My point is, why seasonally adjust at all?? Just report the numbers. We know sales drop off in the fall, that's not a secret. Is it that tough to get the sales numbers and report the actual numbers. What are we keeping, two sets of books??

    Then we use this fictional "seasonally adjusted" number for our decision making process.... really???

    Do you seasonally adjust your bank balance when you balance your checkbook?

    Does the gas station seasonally adjust how much gas they give you?

    Does the grocery store seasonally adjust your total grocery order when you check out?

    But, when it comes to reporting house sales, we don't report actual growth or decline numbers. Someone in a back room massages the numbers and reports a seasonal adjustment. Why?? Because it "smooths" out the trend line?

    When we traveled to the moon, did we seasonally adjust our trajectory data?

  21. swebb


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    21   8:20pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    Call it Crazy says

    My point is, why seasonally adjust at all?? Just report the numbers. We know sales drop off in the fall, that's not a secret. Is it that tough to get the sales numbers and report the actual numbers. What are we keeping, two sets of books??

    If you are trying to make meaningful comparisons for month over month changes in the presence of seasonal patterns, it's quite helpful to account for the seasonal patterns. If the seasonal pattern isn't easily modeled (or of someone alters the model to suit their agenda) then it's not as helpful.

    Month over month comparisons need the seasonal adjustment to be readily meaningful, especially to the general public who doesn't just "know" the seasonal trends. Year over year, sure..throw out the seasonal adjustment, but MoM needs it. The more seasonal the thing you are tracking, the more important it is.

  22. Call it Crazy


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    22   8:40pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    swebb says

    Month over month comparisons need the seasonal adjustment to be readily meaningful, especially to the general public who doesn't just "know" the seasonal trends. Year over year, sure..throw out the seasonal adjustment, but MoM needs it. The more seasonal the thing you are tracking, the more important it is.

    Most people know housing is seasonal, it's not a secret.

    I get why they do the SA, but it seems to be done in a back room where no one truly knows the methodology. I also understand that you can't just look at one MoM result to make a decision. You need to look for a trend line. So, they do a SA to smooth out the rise and fall of the MoM.

    My issue is that the SA numbers are the ones that are "advertised", but you have to go dig real deep for the NSA... it's like the best kept secret..

    Just throw both of them out together on the same graph on the initial news story and let the reader decide what they want to see. If an idiot wants to rely on a MoM NSA number to make a financial decision without doing more research or looking at multiple MoM's, they deserve what they get.

    The other side is that someone will use this "advertised" SA number, saying the "media said sales are up so I'm going to buy", only to find out, the majority of the major areas in the country were down when they look at actual sales comps.

  23. Mark D


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    23   8:54pm Wed 26 Dec 2012   Share   Quote   Permalink   Like (1)   Dislike  

    Call it Crazy says

    My point is, why seasonally adjust at all??

    no that wasn't your point. THIS was your point:

    So.... if the same methodology is used each month, why the differences?

  24. Mark D


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    24   9:00pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    Call it Crazy says

    My issue is that the SA numbers are the ones that are "advertised", but you have to go dig real deep for the NSA... it's like the best kept secret..

    how come you never complained about the unemployment numbers which are seasonally adjusted UP all the time?

  25. The Professor


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    25   9:07pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike   Protected  

    Seasonal adjustment is like salt and pepper, it makes the numbers more palatable.

  26. Call it Crazy


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    26   9:16pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    Mark D says

    how come you never complained about the unemployment numbers which are seasonally adjusted UP all the time?

    You really want to go there????

  27. Call it Crazy


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    27   9:18pm Wed 26 Dec 2012   Share   Quote   Permalink   Like   Dislike  

    Mark D says

    Call it Crazy says

    My point is, why seasonally adjust at all??

    no that wasn't your point. THIS was your point:

    So.... if the same methodology is used each month, why the differences?

    No, my point was, the SA can be what ever they want it to be that month... there's no way to prove or disprove it.... just what they want the end number to be...

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