by Calculated Risk on 8/03/2009 01:17:00 PM

From Bloomberg: Mortgage-Bond Rally May End on Housing Reality, Barclays Says (ht James)

While an S&P/Case-Shiller index for May showed the first month-over-month price increase since 2006 and a 2 percent seasonally adjusted annualized drop, a more-accurate reading probably would have been an annualized decline of 10 percent to 15 percent, [Barclays' analysts Ajay Rajadhyaksha and Glenn Boyd] wrote.

... seasonally adjusted home-price data has been skewed higher during the spring months of this year and last year by an “amplified” version of typical patterns, according to the analysts. More homeowners sell their properties during those months, cutting the share of foreclosed homes being offloaded at distressed prices, as new buyers focus on “desirable neighborhoods” where values hold up better, they said.
...
Data reflecting a reversal of the seasonal benefit, as well as “a tide of new foreclosure sales” as a moratorium on the seizing of homes put in place by banks subsides, will lead to “renewed weakness” in the fall, they said.
...
They project that U.S. home prices will fall an additional 11 percent on average before bottoming next year, bringing the total decline to 40 percent from their peak.

This is similar to the argument Mark Hanson made last week (See: Housing Bottom? No, the Mother of All Head Fakes). I think we will see further price declines in the mid-to-high end bubble areas where the prices have still been sticky.