The year over year decline in the Case Shiller index accelerated again in August to 17.7%, from 17.4% in July. The month-to-month rate of decline stayed at 1% (higher than the June rate, which gave people some brief hope).
All markets declined year over year. 18 out of 20 declined on a month-to-month basis, the highest in many months. Analysts will have to look hard to find something positive here.
The good news, such as it is, is that the year over year rate of acceleration has slowed significantly in recent months. It seems reasonable to think that August or September might mark the peak in the rate of year-over-year price decline. On the other hand, given the wall consumer spending smashed into in September, these months might NOT mark the peak.
This doesn’t mean that the housing market has “bottomed,” obviously–far from it. It just means (we think) that the rate at which prices are dropping will soon begin to decline.
Unless the velocity of the market decline suddenly stages a remarkable turnaround, we are probably about halfway through the price decline (there’s no reason for the slope of the S curve during the deceleration to be any different than the slope on the acceleration, in our opinion). This would imply a peak to trough decline of just over 40%.
The decline so far in the Comp 10 (10 cities) is 22%. The decline in the Comp 20 is 20%.
Here are the monthly year over year rates of decline for the Comp 10, starting in January 2007:
Comp 10 Index: Y/Y Change
July 2007: -4.4%
January 2008: -11.4%