Wednesday, November 25, 2009

Bay Area Home Prices Posied for Another Downturn?


The Case-Shiller numbers are out and we've updated our monthly graph of the data to the right. As usual, we've included futures market data on the index from the CME to get a view of where the market thinks home prices are heading.

Granted, these future contracts barely trade. But it was interesting to see that the price of the June 2010 contracts got pushed down significantly. As you can see, continued declines in Bay Area homes are expected.

The real catalyst to real estate taking another hit will be when interest rates rise. Most economists expect this to occur in early 2010. That plays out well with the data in the graph.

3 comments:

  1. Whoa.I picked a bad week to stop sniffing glue...

    ReplyDelete
  2. The markets and economy need to "RESET" because to the false and cheap credit caused by the Federal Reserve and their partner's in crime, government. Both of them make big bucks off of inflationary policies and increased values. That's why government loves to take percentages... higher price/cost more profit for plutocracy.

    Natural laws of sound economics and the taxpayers need the corrections, but government and banks are propping the system up, because they both have too much to loose... much more than the people. The biggest slice for them to lose, POWER and CONTROL.

    Now you know why government stole from the people to bailout the banks and turn Wall st into a artificially welfare funded casino.

    It's called FIAT money system.

    ReplyDelete
  3. We have been through this all before in the S&L crisis. I had the unfortunate assignmnt of working as a government contractor packaging up failed properties and sellling them of for the government and financial institutions. What is different is the number of Americans unemployed and low interest rates which effectively means our we are low on gas to get out of this recovery quickly. However, the answers as they were in the 80's are ever present in our history books, lower taxes, deregulate (yes deregulate) and provide incentives for investment. Jobs are created by wealth generation and I am sorry to say providing more bailouts and handouts is not the answer. We have no one to blame but ourselves as we vote the individuals into office who in large part caused this mess and we (collectively) took advantage of low teaser interest rates, did not read the fine print and now are claiming we were fooled. As for me, I am investing outside of the country until the end of 2010 or early 2011 when I expected real estate to again have potential again in the US.

    ReplyDelete

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