Case Schiller Says: Twin Cities Market Still Contracting

by Alex Stenback on May 27, 2008

No surprise here, as the S&P/Case Schiller Home Price Index shows the continuing unwind of our local real estate market.  Median sales prices for March (year-over-year) were down 14.1%, in near lock-step with the reported national average of 14.4%.

Case_schiller_april_08

Bloomberg reports the most useful summary, which can be applied to our market, and nearly all others:

"There is excess supply, weakening demand, prices are falling and will continue to fall,” said Kevin Logan, senior market economist at Dresdner Kleinwort in New York. "Housing sales are still trending lower.”

We’d only add that demand in many quarters is not so much weakening as it is being curtailed by tighter lending standards and those that can’t sell their current home (at a loss) to enter the market as buyers.

{ 3 comments… read them below or add one }

Greg Broadbent May 27, 2008 at 9:02 pm

Are these stats only available in your local market? I was just wondering how I might be able to find it for my area.

Richard May 29, 2008 at 3:41 pm

Can you elaborate on your comment about demand not weakening, but rather being curtailed? It seems like a fine distinction in any case — lack of liquidity is a classic economic reason for falling demand, but I’d be interested in knowing your thoughts behind qualifying the comment about demand.

Chuck May 29, 2008 at 9:21 pm

RE: “tighter lending standards”

Gee, mortgage lenders now don’t offer loans that borrowers default on, because the investors that used to buy the loan pools have been wiped-out by those loans. I guess that means prices need to fall to a point where the loan terms support prudent loan underwriting given borrowers’ income. Hello 2001.

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