It’s not just guys like Whitney Tilson who think that the modest sequential gains seen in the Case-Shiller don’t mean much.
RBS analyst Stephen Stanley concurs:
We continue to be pleasantly surprised with the vigor of the rebound in home prices as measured by Case-Shiller. We are dubious that such a robust pace of increase can be sustained for very long. We view this as a dead-cat bounce after the entire market was severely depressed in the crisis environment seen in late 2008/early 2009. Moreover, whenever the dead-cat bounce ends, we expect home prices to settle into a prolonged period of stability or at best gains that are slower than nominal income growth, as the pendulum swings from very expensive in 2006 to very cheap before all is said and done. Nevertheless, in the meantime, we would not be surprised to see the Case-Shiller figures post decent, though decelerating, gains in the next month or two, and then we’ll see what happens in the winter.
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