RICS Global Real Estate Weekly: Downturn Continues In US Economy and Housing Market


• Data releases in the US next week are expected to confirm a further deterioration in both the housing market and the wider economy. Existing home sales for October will be released on Monday 24th, followed by data on new home sales on the 26th. The September release of existing home sales reported a rise in the volume of sales to 5.2m, from 4.9m in August; that was the highest figure over the last 12 months. New home sales also reported a small monthly increase but were still around 30% lower than September 2007. Given that consumer confidence and builders’ sentiment remain weak, home sales on both series are unlikely to have improved any further.

• The release of house price data for September by the Case-Shiller (CS) index and the OFHEO on Tuesday 25th will also be of interest. The OFHEO index samples the en-tire geographic US housing market while the CS index represents only 20 cities. Although they move in-synch with each other, the CS index has been more extreme both on the way up and in the current decline – its head-line index shows house prices have fallen 20% from their peak, as opposed to 6.5% on the OFHEO data. The pace of declines has stabilized in both indices recently but they are still expected to show annual house price declines of around 7% by the OFHEO and 17% on the CS index.

• Finally, the release of preliminary GDP from Q3 on Tues-day 25th should echo the small contraction reported in the (less comprehensive) first release from October. Un-fortunately, this looks like only the beginning of a painful contraction in the economy, to be accompanied by more weak data on the housing market.


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