October 4, 2007

CME says San Francisco will fall 25.9%

Home-Price Outlook Takes Another Shot – WSJ.com

The outlook for house prices is getting even gloomier as traders on the Chicago Mercantile Exchange bet on steep price declines and the number of homes for sale grows.

Traders on the CME expect home prices in 10 major cities to drop an average of about 10% from mid-2007 to November 2011, according to an analysis by Tradition Financial Services Inc., New York, of prices for housing futures traded on the exchange.

Oh yeah? But what about Palo Alto?

That’s right – the growth number is so large, they couldn’t fit it on this graph.

This is yet another example of MSM (Main Street Media) manipulating data to hide the truth we know in our hearts.

Comments (8) -- Posted by: burbed @ 6:26 am

8 Responses to “CME says San Francisco will fall 25.9%”

  1. DensityDuck Says:

    Note that this isn’t actual decline in actual prices. It’s expected decline in future prices–and even more than that, it’s based on futures trading. It’s the financial equivalent of an “over/under” bet.

    That said: Considering that the modern real-estate market is about 85% speculation, I guess we should be worried about financial fookery!

  2. PA Homeowner Says:

    Burbed – I am a big fan of the site, but I think you have this one wrong. The WSJ article noted that there are only 20 contracts being traded a day – this is such paltry volume that its hard to take the numbers seriously. When real money is staked on these contracts, it might be worth paying attention to, but not with just 20 contracts a day.

    As for Palo Alto, some shack down the street from me just sold in a week, probably above the insane $925k that was asked for the 800 sq ft shack on a 3000 sq ft lot. I don’t understand it.

  3. Jas Jain Says:

    “But what about Palo Alto?”

    What about it?

    Just curious,


  4. sonarrat Says:

    I bet you there were more than 20 contracts being traded per day, oh, about a year ago..

  5. ex-sunnyvale-renter Says:

    I don’t understand what is supposed to make Palo Alto so elite. Sure there’s a nice neighborhood along Middlefield and Cowper etc. and you have “professorville”, but you also have East Palo Alto – the spillover of which comes downtown. You have all of those slum-partments along Alma. You have El Camino Real – pass the last peep show place and you’ll know you’re in Atherton. You have that whole dead zone (to techies, not to meth brewers) along 101. People are paying an awful lot of money so their kids can hang out with their hipster friends in “egg park”.

  6. Samuel Says:

    I don’t understand what is supposed to make Palo Alto so elite.

    Um…the money?

  7. mouse Says:

    It is the school…it all has to do with the API rating.

  8. sonarrat Says:

    Indeed, good schools drive up home prices. I recall most of the price inflation in Morgan Hill happened after our elementary school was placed on the California Distinguished School list. Why that also affects the prices of studio condos that two people couldn’t stand upright in, I’m not so sure.

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