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Friday, March 02, 2012

House Prices and Future Contracts

by Calculated Risk on 3/02/2012 04:14:00 PM

From HUD: Housing Scorecard

The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the February edition of the Obama Administration's Housing Scorecard
This monthly housing report is an overview of the U.S. housing market, and has data (and sources) for prices, inventory, foreclosures, modifications and much more.

One of the graphs shows house prices (using Case-Shiller composite 20 NSA) and future expectations of house prices from two different points: January 2009 and current.

From the report: "S&P/Case-Shiller 20 metro composite index (NSA) as reported monthly. Futures index figures report forward expectations of the level of the S&P/Case Shiller index as of the date indicated, estimated from prices of futures contracts reported by Radar Logic."

House Prices and Futures Click on graph for larger image.

The dark blue line is actual prices using the Case-Shiller Composite 20 index (NSA). The light blue dashed line shows the market expectations for the Case-Shiller index as of January 2009. Expectations in January 2009 were for prices to fall further, and for prices to bottom at the beginning of 2011 (prices didn't fall as far as expected, and, as of December 2011 (the most recent Case-Shiller report), still haven't bottomed.

The darker blue dashed line is current expectations for the Case-Shiller index. Investors now think the Case-Shiller composite 20 index has bottomed.