My favorite leading indicator for the housing market is Altos Research’s 10 city composite index which is reported on a monthly basis, giving you a heads up on what to expect from Case-Shiller. The news from December was not good–and is probably enough to keep Banana Ben up at night wondering how many more Federal Reserve notes need to be created from thin air. The report pretty much confirms the trend that housing is officially in a double-dip scenario, despite the Fed’s illegal money printing. It will also provide the Fed with an excuse to implement QE 3 sometime in mid-2011. From the report:
December 2010 Highlights
The Altos 10-City Composite is now at $448,996, off 1.63% from last November 2010.
All 27 of the major markets tracked by the report showed seasonal price decreases. Most were relatively minor, with the steepest declines seen in San Francisco (down 4.77%), San Diego (down 3.71%), and Minneapolis (down 3.16%), respectively.
Housing inventory is off by 5.89% nationwide, with dramatic decreases in several major markets, including Boston, San Francisco, and Seattle.
The declines shown reflect expected seasonal downturns.
About the only positive from the report was the slight decrease in housing inventory. Thought that does not seem to be helping prices at the moment. But don’t expect this trend to continue according to Altos. Home sellers usually wait to list a property in the spring because that is the best time from a seasonal perspective. Altos anticipates that the level of housing inventory will increase as sellers try to capitalize on the most active period for the housing market. The only question left if how much farther do prices fall during the double-dip. The major banks better pray the answer is not too much more because that would trigger more write downs of all ready insolvent institutions (here’s looking at you BAC).