by CalculatedRisk on 10/06/2011 10:19:00 AM

Notes: This CoreLogic Home Price Index report is for August. The Case-Shiller index released last week was for July. Case-Shiller is currently the most followed house price index, but CoreLogic is used by the Federal Reserve and is followed by many analysts. The CoreLogic HPI is a three month weighted average of June, July and August (August weighted the most) and is not seasonally adjusted (NSA).

From CoreLogic: CoreLogic® August Home Price Index Shows Month-Over-Month and Year-Over-Year Decline

CoreLogic ... today released its August Home Price Index (HPI) which shows that home prices in the U.S. decreased 0.4 percent on a month-over-month basis, the first monthly decline in four months. According to the CoreLogic HPI, national home prices, including distressed sales, also declined on a year-over-year basis by 4.4 percent in August 2011 compared to August 2010. This follows a decline of 4.8 percent in July 2011 compared to July 2010. Excluding distressed sales, year-over-year prices declined by 0.7 percent in August 2011 compared to August 2010 and by 1.7 percent in July 2011 compared to July 2010. ...

“Although the calendar says August, the end of the summer traditionally marks the beginning of ‘fall’ for the housing market as it begins to prepare for ‘winter.’ So the slight month-over-month decline was predictable, particularly given the renewed concerns over a double-dip recession, high negative equity, and the persistent levels of shadow inventory. The continued bright spot is the non-distressed segment of the market, which is only marginally lower than a year ago and continues to exhibit relative strength,” said Mark Fleming, chief economist for CoreLogic.

Click on graph for larger image in graph gallery.

This graph shows the national CoreLogic HPI data since 1976. January 2000 = 100.

The index was down 0.4% in August, and is down 4.4% over the last year, and off 30.4% from the peak - and up 4.8% from the March 2011 low.

As Mark Fleming noted, some of this decrease is seasonal (the CoreLogic index is NSA). Month-to-month prices changes will probably remain negative through February or March 2012 - the normal seasonal pattern. It is likely that there will be new post-bubble lows for this index late this year or early in 2012.

by CalculatedRisk on 10/06/2011 08:30:00 AM

The DOL reports:

In the week ending October 1, the advance figure for seasonally adjusted initial claims was 401,000, an increase of 6,000 from the previous week's revised figure of 395,000. The 4-week moving average was 414,000, a decrease of 4,000 from the previous week's revised average of 418,000.

The following graph shows the 4-week moving average of weekly claims since January 2000 (there is a longer term graph in graph gallery).

Click on graph for larger image in graph gallery.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims declined this week to 414,000.

This is the lowest level for the 4-week average of weekly claims since August, and this was below the consensus forecast of 410,000. Still elevated, but some improvement.

by CalculatedRisk on 10/06/2011 12:04:00 AM

Reis reported that the apartment vacancy rate (82 markets) fell to 5.6% in Q3 from 6.0% in Q2. The vacancy rate was at 7.1% in Q2 2010 and peaked at 8.0% at the end of 2009.

From the WSJ: Landlords Push Up Apartment Rents

The vacancy rate for the third quarter, which wraps up the prime leasing season, fell to 5.6% from 7.1% a year earlier. That is the lowest since 2006.

The increased demand follows several years that saw little new apartment development. About 8,200 units came online during the third quarter, one of the lowest quarterly figures since Reis began tracking the data in 1999.
...
Average effective apartment rents, the amount paid after discounting, rose to $1,004 nationwide in the third quarter, up 2.4% from a year earlier ... In the third quarter, 36,000 net units were filled, down from 42,000 in the second quarter.

Click on graph for larger image in graph gallery.

This graph shows the apartment vacancy rate starting in 2005.

Reis is just for large cities, but this decline in vacancy rates is happening just about everywhere.

A few key points we've been discussing:
• Apartment vacancy rates are falling fast.

• A record low number of multi-family units will be completed this year (2011). Only 8,200 apartments came on the market in Q3 (in the Reis survey area).

• Multi-family starts are increasing, and that is helping both GDP and employment growth this year. These new starts will not be completed until 2012 or 2013, so vacancy rates will probably continue to decline.

Earlier:
• Reis: Office Vacancy Rate declines slightly in Q3 to 17.4%
• ADP: Private Employment increased 91,000 in September
• ISM Non-Manufacturing Index indicates expansion in September
• Europe Update: New Stress Tests and Bank Recapitalisation
• Employment Situation Preview: Another Weak Report

by CalculatedRisk on 10/05/2011 08:58:00 PM

A rare open thread for discussion - and a few articles on the passing of Steve Jobs ...

• From the LA Times: Steve Jobs: More than a turnaround artist

• From the NY Times: Steve Jobs, Apple’s Visionary, Dies at 56

• From the WSJ: Apple's Steve Jobs Is Dead

• From CNBC: Apple Says Former CEO Steve Jobs Has Passed Away

Earlier:
• Reis: Office Vacancy Rate declines slightly in Q3 to 17.4%
• ADP: Private Employment increased 91,000 in September
• ISM Non-Manufacturing Index indicates expansion in September
• Europe Update: New Stress Tests and Bank Recapitalisation
• Employment Situation Preview: Another Weak Report

by CalculatedRisk on 10/05/2011 03:50:00 PM

This sounds like EU policymakers are getting ready for either larger haircuts for private Greek debt holders or a default. And is sounds like they are preparing to force the banks to recapitalize. These tests are going to have be conducted pretty quickly ...

• From the Financial Times: EU banks face new ‘Greek’ stress test

European Union finance ministers have asked the bloc’s leading bank regulator to test the strength of Europe’s banks on the assumption of a big writedown on Greek sovereign debt.

The move, a tacit admission that the European Banking Authority’s two previous rounds of bank stress tests were not sufficiently robust, came as Angela Merkel ... said she was prepared to recapitalise her country’s banks if necessary.
excerpt with permission

The article says Merkel would like to discuss an EU-wide bank support plan at the next EU summit in two weeks.

• From the WSJ: IMF Floats Bond-Buying Proposal in Europe

The International Monetary Fund could create a special financing tool to buy bonds in private markets as a way to help stem the euro zone's debt crisis, a senior IMF official said Wednesday.
...
Such a plan could aid countries such as Spain and Italy, which face rising costs for financing in capital markets.

• From the WSJ: ECB Chief's Legacy Under Fire

Many economists expect the ECB to keep interest rates on hold at Thursday's meeting, despite signs that the euro-zone economy is stagnating and may even slide into recession later this year. ... Mr. Trichet is expected Thursday to unveil new stimulus measures aimed at protecting European banks from short-term funding pressures.

The Greek 2 year yield is up to 66%. The Greek 1 year yield is at 140%. (Obviously expecting a large haircut)

The Portuguese 2 year yield is down to 17.5% and the Irish 2 year yield is at 7.1%.

The Spanish 10 year yield is at 5.1% and the Italian 10 year yield is at 5.5%.