Case-Shiller: Still Moving Lower, How Much is A Home Really Worth?

We saw year over year number down again ( although better than we have seen before and monthly numbers actually tick up slightly).

January S&P/Case Shiller Composite-20 Y/Y -0.7% vs -0.7% consensus, prior -3.1%

Here is what the value of a house looks like using the monthly data of the Case-Shiller Report…. (30% lower would be the average valuation destruction…)

(Click to enlarge)

Now for the real stupidity…..

According to a report in Bloomberg:

One reason home values are depressed is that foreclosed houses are adding to inventory of unsold homes, which compete with more expensive new housing. Foreclosures may climb to 4.5 million this year from 2.8 million in 2009, according to Irvine, California-based RealtyTrac Inc.

Of course the fact that new housing is still being built and hurting supply/demand never seems to enter the conversation. How ridiculous that we are allowing the continuation of building while there is a massive amount if inventory on the market already. No amount of government trickery or outright benefits to the new home building sector or by pumping money to the banks to hold off foreclosures….

The Obama administration last week announced plans to help Americans avoid foreclosure, including subsidies for borrowers who owe more than their home is worth. The plan expands Treasury Department and Federal Housing Administration efforts and uses funds from the $700 billion Troubled Asset Relief Program.

Let’s not even focus on the fact that the TARP was not to be used for these types of benefits. It was there as a backstop to the banking industry, which was unable to control their greed and send the housing market into ints tailspin. Good news though, we are hearing that sub-prime bonds are starting to sell again and securitization is being pushed by the banks with the support of Congress. (Sound familiar?)