Case-Shiller housing update

With Case-Shiller reporting its monthly numbers yesterday (CS 140.86) we decided to do a follow up to our recent housing report:  In the report we noted the following:

We anticipate that the housing market will remain under pressure from 2006 – 2015 or so. Typically these types of declines take about one decade to complete. On the downside we are not expecting much more of a decline. Possibly into the 130′s area over the next few years, with an outside chance of hitting the 1989 high around 125. This would represent a total decline between 33% and 38%. Housing has already declined 30%. Once the bottom occurs we would expect a multi-year rally and then a retest of the lows, somewhat similar to the 1932-1942 and 1975-1985 periods. The second bottom should occur by the mid-2020′s. Then a new bull market in US housing should get underway.

After a sharp 32.6% decline from CS 207 in July 2006 to CS 139 in April 2009, the US real estate market made its first major low and started a counter-trend rally. This rally lasted until July 2010 when the index hit CS 149: +6.9% rebound. Since then, however, prices in the housing market have been drifting lower, and they just confirmed another long term downtrend. If we count the first decline (Jly06-Apr09) as wave A, and the counter rally (Apr09-Jly10) as wave B, then we are now in wave C of the housing bear market. As noted above, we’re not expecting a substantial decline: Possibly into the 130′s area over the next few years, with an outside chance of hitting the 1989 high around 125. Nevertheless, the housing market should remain soft going forward.

About tony caldaro

This entry was posted in special report and tagged , , , , , , . Bookmark the permalink.

8 Responses to Case-Shiller housing update

  1. Pingback: Has the US Housing market really bottomed? | the ELLIOTT WAVE lives on

  2. chrys50 says:

    Tony – here is another fundamental reason I believe we have another leg down in the housing market.

    “FHA insured loans dominate top 20 metro areas – The near nothing down mentality is the new rage in the housing market. FHA loans showing massive delinquency rates and have the potential of costing the taxpayer $100 billion in another bailout.”

    Full story here:


    • tony caldaro says:

      Where is the data in regard to down payments? See the data of FHA loan participation … nearly 90% … a known fact. Just think it’s another writer calling for a crash after a crash. Lot’s of that kind of writing since 2008.


  3. chrys50 says:

    Tony – thanks for the update. Why does the red projection line descend to a lower level (110) than what is stated in the narrative (125-130 level)? Or is that the retest, second bottom for 2025?


    • tony caldaro says:

      Hi Chrys, That’s Shiller’s projection.

      Love oneself, or love oneself and all others. It’s a choice. Your future depends on it. Time is short. Make the choice!


      • chrys50 says:

        Thanks Tony. Why wouldn’t wave C (current wave) be some Fib multiple of wave A. 125-130 doesn’t seem low enough. Shiller’s projection looks closer to what I would expect.


  4. Lee X says:

    Thanks Tony


Comments are closed.