NEW YORK (Real Money) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.
This past week, Kass said he expects Europe's weak QE to backfire, sending stocks lower. He's shorting the SPY and buying a gold ETF. Kass expects home prices to fall in the second half of the year, which may help stabilize home sales.
Must Read: When Must I Buy a Stock to Get the Dividend?¿
Originally published on Dec. 30, 2014 at 9:27 a.m. EST
- Surprise No. 12
Home prices fall in the second half of 2015.
"I told my mother-in-law that my house was her house and she said, 'Get the hell off my property.'" -- Joan Rivers
"Under the weight of reduced home affordability, still-low household formation gains and continued pressure on real incomes, home prices fall in 2015. Builders lose pricing power." -- Kass Diary, 15 Surprises for 2015
According to the S&P/Case-Shiller Home Prices Index, home prices in October rose 0.76% month-over-month and rose 4.5% year-over-year, both a touch above expectations, but September was revised slightly lower. Prices on a year-over-year basis has now slowed for 11 straight months, and the gain of 4.5% is the slowest since September 2012, as not one of the 20 cities surveyed saw a double-digit gain.
San Francisco and Miami had the strongest price increases, with Cleveland the least. Bottom line, the housing industry in 2014 has had a year of fits and starts as the homeownership rate continues to fall. Investors are buying fewer homes, credit standards remain tight, and income growth remains sluggish (albeit less so), but job growth has improved and mortgage rates are historically low.