To repeat what I said last month: As we have been saying every month since early January when we made our call on housing bottoming, the S&P/Case-Shiller index is a lagging indicator and housing prices will bottom in 2Q09. To be clear, I said that housing would bottom in terms of sequential price declines and inventory growth in Q2 of 2009. We are getting closer by the day!
Guess what today is? Today is that day!
According to the S&P/Case-Shiller index, home prices in 20 U.S. cities fell 18.6% in February from 19% in January – the first sequential improvement since January 2007. We are well into the 2Q09 and the housing market is less bad.
Arresting the slide in residential real estate should become the leading indicator that the worst of times is over; or at the very least, that the bottom is near. Increased confidence in the real estate asset class will allow the assets to obtain higher prices, and that is what happening to market at the time of writing.
Howard W. Penney
Managing Director