S&P/Case Shiller recently released the March figures for median home prices in the 20 cities they analyze. As many of you know, the Chicago Merc trades futures contracts based on these home-price indices. Below we highlight the difference between the actual March home price figures and the contract price of the home-price futures expiring in May 2008. As shown, all eleven contracts are indicating increased weakness in the housing market. Las Vegas is expected to decline the most, while San Francisco is expected to decline the least.
We also made charts of the historical year-over-year monthly percent change in the actual home-price figures for the 20 cities that S&P/Case Shiller tracks. These charts paint a pretty good picture of the severity of the declines in home price appreciation across the board. The one exception is Charlotte, where a decline has yet to take place.
You wrote that the charts show "the severity of the declines in home prices across the board."
Yet, your own 20-city composite shows current year-over-year price change at approximately minus 2%.
Is that "severe" ???
Posted by: JWalker | June 04, 2007 at 09:02 AM
You are right. We meant to say, the "severity of the declines in home price appreciation across the board." The wording has been updated. Thanks.
Posted by: Paul Hickey | June 04, 2007 at 09:54 AM
This is a great chart. TFS, the leading CME housing options broker, broadcasts the TFS Housing Metrics sheet weekly that shows not only these changes, but also a chart of these "predictive" views. The housing traders change their views by as much as 5% for the forward year. It looks like it will be difficult for the housing futures forwards to change shape and become contango.
Posted by: Fritz | June 05, 2007 at 02:35 PM
It would be interesting to plot this summary vs a number of economic indicators to see what the true correlations are for home appreciation (i.e. Feds funds rate, gdp growth, job growth, population growth, etc,)
Posted by: drbrightside | June 10, 2007 at 07:26 PM