Despite decent economic data stocks sold off hard and enter the final hour with substantial losses. The Census Bureau’s latest report on State and Local Tax revenue holds a glimmer of hope. On a year ago basis they increased .8% in the 1st quarter of this year on a 2.7% increase in state income tax, sales tax gained .3% while corporate taxes fell 5.4% and property taxes slipped .6%.
The April Case Schiller Home Price Index increased .8%, largely due to the artificial demand created by the now expired Federal Tax Credit. The report also noted the Seasonal Adjustments continued to unduly distort the series. Some notable standouts include San Francisco +18% from a year ago and +2.2% for the month; San Diego +11.7% from last year and .7% for April and Los Angeles +7.8% in the last 12 months and +.7% in April. They went on to state that the post Federal Credit expiration data shows sharp declines in housing starts and buyer activity suggesting price declines are on tap.
In fact the Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions shows that first time buyers made up 46% of the market in May, 3% less than the 49% for April. With their latest traffic diffusion indexes out we find that buyer traffic has plunged just like the New Home Sales data last week. Nationally 1st time homebuyer traffic plunged 44%, investor traffic fell 9% and existing homeowner traffic slipped 17.5%. Here in California despite the State spending money it doesn’t have to support real estate prices with its own tax credit 1st time homebuyer traffic fell 22%. With that program nearly out of funds I would expect future data series to deteriorate further.
Hi and welcome to The Profit Motive, I’m your host Caleb Lawrence. Once upon a time in America the media acted as the watchdog of the corporations and the state. In the modern era it’s all about ratings and profits, opinion has been substituted for news and frequently is presented as fact. 
