Above the Fold      

Home Prices Continue to March Lower, but We Really Don’t Know How Far They’ve Fallen

Most professionals and Main Street investors use the popular S&P CoreLogic Case-Shiller Home Price Indices to gauge the health of the American housing market. Originally developed in the 1980s by Karl Case and Robert Shiller, the data are now released monthly and include a national home price index, a 20-city composite index, a 10-city composite index and 20 individual metro area indices. But there’s one critical flaw, all the indexes have a two-month lag … which in a fast-rising or quickly declining market, can be an eternity. There are, of course, other sources such as the U.S. Census Bureau, National Association of Realtors and even digital real estate sites such as Zillow and Redfin, but all have their own unique flaws from sample size to frequency and even incorrect algorithms (Zillow suffered massive losses as it failed to properly value homes it purchased). The point is that one of the most comprehensive indicators of home values is just now releasing September values, now the third straight month of declines for Case-Shiller.

By the numbers, home prices slid 1% nationally in September from August. On an annual basis, the index dropped to a year-over-year increase of 10.6% in September, down from a 12.9% rate the previous month. Looking regionally, the 10-city composite rose 9.7% annually, down from 12.1% in August, and the 20-city composite increased 10.4% in September, slowing from a gain of 13.1% the previous month. The data showed slowing growth in all 20 cities, and trends have likely continued as more recent National Association of Realtors (NAR) data showed just a 6.6% annualized price increase in October as existing home sales (volume) fell 5.9% from September and 28.4% from one year ago. While we don’t know exactly where home values are, investors can look at multiple data sources to better gauge current market climates. 

Three Things                           

Some Good News for Homebuyers

Earlier this week, the Federal Housing Finance Agency (FHFA) announced a $79,000 increase for conforming loan limit values (CLLs) in 2023. In most of the United States, the 2023 CLL value for properties will be $726,200, up from $647,200 in 2022.​ When it comes to buying a home, borrowers typically fall within two categories, conforming or non-conforming. Non-conforming loans, such as jumbo loans, can come with higher rates and/or fees as they are not guaranteed or purchased by Fannie Mae and Freddie Mac. With the FHFA increasing conforming loan limits, consumers can borrow more and still be “conforming,” hopefully saving costs and making the loan process easier for some. 

Apple Allegedly Gets Pushy With Twitter

According to Elon Musk, Apple has threatened to remove Twitter from its App Store. The App Store is the only way for iPhone users to download software. It also collects 30% tax on all purchases made through the store, so Twitter’s removal could be greatly impactful for both companies. The outspoken Twitter owner also announced that Apple has ceased most of its advertising on the platform. Apple has declined to comment on the matter, but Musk said he’d consider creating an “alternative iPhone” if Twitter were to be booted.

Amazon Steps Into Supply-Chain Management

Amazon’s web services division is launching a new cloud-based application to compete in the fast-growing supply-chain technology space. The new offering, called AWS Supply Chain (super creative name), is designed to help merchants manage increasingly complex cargo flows and fast-changing inventory demand. Amazon is looking to target small to medium-sized companies that specialize in direct-to-consumer online sales by empowering them to properly manage stock and delivery estimates. Logistics management has come to the forefront as the pandemic created waves of disruptions and full-on production or shipping shutdowns that created massive imbalances in global supply and demand.  

In the Know                           

December’s Astronomical Gift

December is certainly known for its holiday cheer as various religious festivals such as Hanukkah, Christmas and Kwanzaa all fall within the month. But if you look up to the stars on Dec. 13 after 9 p.m. Eastern time, you’re likely to catch a glimpse of the Geminid meteor shower, which is the biggest shooting star event of the year. The Geminids occur annually between Dec. 4 and Dec. 16, and during peak times, it’s not uncommon to see 75 meteors per hour falling to the earth. And because they will share the sky with a bright Gibbous moon, it’s best to face away from the moon to best spot them.