On The Margin: Total Unemployment December 2008

Today’s Employment Situation report showed that in December “total unemployment” jumped dramatically, nearly 1%, to 13.5% of the civilian population or 20,850,000 workers.

The traditional unemployment rate is calculated from the monthly household survey results using a fairly explicit qualification of “unemployed” (essentially unemployed and currently looking for full time employment) leaving many workers to be considered effectively “on the margin” either employed in part time work when full time is preferred or simply unemployed and no longer looking for work.

The Bureau of Labor Statistics considers “marginally attached” workers (including discouraged workers) and persons who have settled for part time employment to be “underutilized” labor.

The broadest view of unemployment would include both traditionally unemployed workers and all other underutilized workers.

To calculate the “total” rate of unemployment we would simply use this larger group rather than the smaller and more restrictive “unemployed” group used in the traditional unemployment rate calculation.

Below is a chart (click for larger version) showing the “total” unemployment rate versus the “traditional” unemployment rate along with the year-over-year percent change to the “total” unemployment rate.

Notice that the “total” unemployment rate has been skyrocketing as of late and has now with the latest 40% year-over-year increase has reached the highest level seen since the government began tracking the many measures of marginalized workers.

The chart below (click for larger) calculates the spread between the “total” unemployment rate and the “traditional” unemployment rate.

Notice that while the total unemployment rate has increased 55% since last year, the difference between the total unemployment rate and the traditional rate has jumped nearly 67%, its highest annual increase on record leaving the spread at its widest on record.

Envisioning Employment: Employment Situation December 2008

Today’s Employment Situation Report showed continued unequivocal and truly dramatic signs of a severely contracting recessionary economy with the Household survey indicating a decline of a whopping 806,000 in employment and a 632,000 increase in unemployment since November resulting in an unemployment rate of 7.2% while the Establishment survey showed a massive decline of 524,000 non-farm jobs over the same period.

Further, there were considerable revisions to prior months with October actually registering a whopping 423,000 non-farm job decline from September and November registering 584,000 non-farm job decline from October resulting in over 1,934,000 million non-farm jobs lost in just four months and 2,691,000 private non-farm jobs shed so far this year.

With the latest news just littered with poor earnings reports and announcements of job cuts and layoffs cutting across all regions and most industries, the recessionary job loss trend now appears to be following a far more severe trend than seen during our prior two recessions.

The following chart combines both the “residential building” and “residential specialty trade contractors” into one payroll series and then plotting the data since 2002.

Notice that, in aggregate, these payrolls, having peaked in March 2006 and declined 20.79% or 718,000 jobs since then, appear to be headed lower.

Also note that independently, “residential building” has lost 23.42% of its payrolls or 239,000 jobs since it peaked during September 2006 and that “residential specialty trade contractors” have lost 19.93% of its payrolls or 486,500 jobs since it peaked during February 2006.

Next, let’s take a look a slightly broader set of industry sectors that have been directly impacted both by the housing boom and now the bust (click for larger chart).

Note that I carefully selected sectors that showed either an obvious expansion-to-contraction trend OR a flattening-to-contraction trend and that ALL sectors have both a historical and logical relationship to residential housing as well as recent industry press releases disclosing declining profits as a result of the housing bust.

As you can see, sectors that are now being directly impacted by the current housing decline are numerous and cut across many levels of the job market from construction and materials to manufacturing and finally to retail.

Combining these series into an aggregate of payrolls “directly impacted” by the housing boom and bust cycle and plotting it, along with the S&P/Case-Shiller Composite Home Price Index (click on chart below for larger version) since 1997 provides some pretty solid evidence that a relationship exists.

To expand the analysis a bit look at the following chart that shows percent change on year-over-year basis to BOTH the “directly impacted” payrolls sectors and ALL private non-farm payroll overlaid with the S&P/Case-Shiller Composite Home Price Index.

To get a sense of the relative intensity of the pullback to the “directly impacted” payrolls by plotting both the percentage of overall private non-farm payrolls that the “directly impacted” aggregate represents as well as the contributions it is making to the rate of change of the underlying total private non-farm payrolls.

Notice that at its peak the “directly impacted” payrolls represented over 6.67% (now 6.08%) of Total Private Non-Farm Payrolls and now contracted to a far more significant degree than that seen during the entire course of the 2001-2003 contraction.

Plotting the ratio of overall and private non-farm payroll as well as the payroll of various business sectors to overall non-institutional population (above 16 years old and not in jail or “juvee”), the last eight years seem to pose more questions than answers.

The payroll-population ratio concept simply provides a mechanism for better isolating the changes to payroll rosters by calculating the percentage of population that is employed in a given sector at any given time.

In the following chart (click for larger version) you can see the ratio of overall non-farm payroll and private non-farm payroll to non-institutional population from 1948 overlaid with all U.S. recessions in that period.

As you can see, there is a fairly strong correlation to declining percent of population employed in non-farm and private non-farm endeavors and recession with particularly good peak-trough alignment for all recessions prior to 1990.

During the 2001 recession (and to a far lesser extent in 1990), although there where large declines to the ratio during the official recession period, the economy seemed to be able resume growth while the ratio continued to slide or stayed well below the peak of the prior expansion.

This is an interesting situation in that, although increases in population have been steady and could have replenished the literal number of jobs lost during the downdraft of 2000-2003, the 2000s expansion of payrolls was not strong (jobless recovery).

The following chart (click for larger version), on the other hand, the payroll ratio related to construction has remained above even the peak set in the 90s expansion but now seems to be coming down.

As you can see, although 2.91% of the population currently is employed in a construction occupation, there is a chance that this percentage could drop far below the trend.

Mid-Cycle Meltdown?: Jobless Claims January 08 2009

Today, the Department of Labor released their latest read of Joblessness showing seasonally adjusted “initial” unemployment claims dropped 24,000 to 467,000 from last week’s revised 491,000 claims while “continued” claims jumped 101,000 resulting in an “insured” unemployment rate of 3.4%.

Historically, unemployment claims both “initial” and “continued” (ongoing claims) are a good leading indicator of the unemployment rate and inevitably the overall state of the economy.

I have added a chart to the lineup which shows “population adjusted” continued claims (ratio of unemployment claims to the non-institutional population) and the unemployment rate since 1967.

Adjusting for the general increase in population tames the continued claims spike down a bit but as you can see, the pattern is still indicating that recession has arrived.

The following chart (click for larger version) shows “initial” and “continued” claims, averaged monthly, overlaid with U.S. recessions since 1967 and from 2000.

NOTE: The charts below plot a “monthly” average NOT a 4 week moving average so the latest monthly results should be considered preliminary until the complete monthly results are settled by the fourth week of each following month.

As you can see, acceleration to claims generally precedes recessions.


Also, acceleration and deceleration of unemployment claims has generally preceded comparable movements to the unemployment rate by 3 – 8 months (click for larger version).


In the above charts you can see, especially for the last three post-recession periods, that there has generally been a steep decline in unemployment claims and the unemployment rate followed by a “flattening” period of employment and subsequently followed by even further declines to unemployment as growth accelerated.

This flattening period demarks the “mid-cycle slowdown” where for various reasons growth has generally slowed but then resumed with even stronger growth.

Until late 2007, one could make the case (as Fed chief Ben Bernanke surly did) that we were again experiencing simply a mid-cycle slowdown but now those hopes are long gone.

Adding a little more data shows that in the early 2000s we experienced a period of economic growth unlike the past several post-recession periods.

Look at the following chart (click for larger version) showing “initial” and “continued” unemployment claims, the ratio of non-farm payrolls to non-institutional population and single family building permits since 1967.

The most notable feature of the post-“dot com” recession era that is, unlike other recent post-recession eras, job growth has been very weak, not succeeding to reach trend growth as had minimally accomplished in the past.

Another feature is that housing was apparently buffeted by the response to the last recession, preventing it from fully correcting thus postponing the full and far more severe downturn to today.

It is now completely clear that the potential “mid-cycle” slowdown that appeared to be shaping up in late 2007, had been traded for a less severe downturn in the aftermath of the “dot-com” recession, and now has we have fully entered, instead, a mid-cycle meltdown.

NARcasting The Future: January 2009

An era has drawn to a close in NARland…

It appears that they have once again modified their forecasting strategy now eliminating the chief economist existing home sales forecast commentary from their regular monthly reporting.

Prior to the fall of 2007, NAR released an independent monthly forecast of existing home sales where their chief economist spun many of the predictions found below.

Then, throughout 2008, NAR merged the monthly existing home sales forecast commentary into the monthly pending home sales report effectively creating one report that covered the most leading home sales data combined with their forward looking “predictions”.

Now, it seems that NAR has decided to eliminate the existing home sales forecast commentary altogether.

The existing home sales forecast itself (the number not the commentary) DOES still exist though, released as one line of their monthly forecast for the “US Economic Outlook” but the commentary we have all grown to know and love is gone.

Don’t be sad though, chief economist Laurence Yun is still providing LOTS of general commentary especially in his almost daily “Quick Take” bloggy-like thing.

From now on I will continue to update this post but take whatever laughable forward looking NAR commentary I can find from either Yun or the new NAR president Charles McMillan.

12/11/2006 Prediction: 6.40 million units.
Lereah "Most of the correction in home prices is behind us."

1/10/2007 Prediction: 6.42 million units. Lereah "The good news is that the steady improvement in sales will support price appreciation moving forward."

2/7/2007 Prediction: 6.44 million units.
Lereah "After reaching what appears to be the bottom in the fourth quarter of 2006, we expect existing-home sales to gradually rise all this year and well into 2008."

3/13/2007 Prediction: 6.42 million units.
Lereah "Although existing-home sales will be marginally reduced due to subprime lending restrictions, they should be gradually rising this year and next."

4/11/2007 Prediction: 6.34 million units.
Lereah "Tighter lending standards will dampen home sales a bit, but by less than a couple of percentage points from initial projections."

4/30/2007
Lereah Leaves NAR for Move.com

5/9/2007 Prediction: 6.29 million units.
Yun "Housing activity this year will be somewhat lower than in earlier forecasts."

6/6/2007 Prediction: 6.18 million units.
Yun "Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year."

7/11/2007 Prediction: 6.11 million units.
Yun "Home prices are expected to recover in 2008 with existing-home sales picking up late this year."

8/8/2007 Prediction: 6.04 million units.
Yun “With the population growing, the demand for homes isn’t going away – it’s just being delayed.”

9/11/2007 Prediction: 5.92 million units.
Yun “Patient buyers in most areas who do their homework will recognize that housing remains a good long-term investment.”

10/10/2007 Prediction: 5.78 million units.
Yun "The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels, while prices remain near record highs, reflecting favorable mortgage rates and positive job gains."

11/13/2007 Prediction: 5.5 million units.
Yun "In some ways, the extended real estate boom from 2001 to 2005 created unrealistic expectations that housing is a short-term high-yield investment… 2007 will be the fifth best year for housing on record"

12/10/2007 Prediction: 5.67 million units in 2007, 5.7 million units in 2008.
Yun "The broad trend over the coming year will be a gradual rise in existing-home sales, but because sales are exceptionally low in the final months of 2007, total sales for 2008 will be only modestly higher than 2007."

ACTUAL: 5.652 million existing units sold in 2007

01/08/2008 Prediction: 5.66 million units in 2007, 5.7 million units in 2008.
Yun "A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008."

02/07/2008 Prediction: 5.38 million units full year.
Yun "Where builders have cut construction sharply, and in most areas with improving affordability conditions, we’ll generally see moderately higher home prices."

03/06/2008 Prediction: 5.38 million units full year.
Yun "Significant price declines in some local markets have sharply and quickly improved local affordability conditions, and are inducing buyers to return to the marketplace"

04/08/2008 Prediction: 5.39 million units full year.
Yun "Exceptionally weak home sales related to jumbo loans problems will depress home prices in the first half of the year, but steady liquidity improvements in the conforming jumbo-loan market will help prices recover in the second half of the year"

05/08/2008 Prediction: 5.39 million units full year.
Yun "Although more than half of local markets are expected to see price growth this year, the aggregate existing-home price will decline 2.4 percent in 2008, driven by a relatively few markets that are very oversupplied"

06/09/2008 Prediction 5.4 million units full year.
Yun "We’re seeing healthy price gains in moderately priced areas like Erie, Pa., and Corpus Christi, Texas, and double-digit gains in others"

07/08/2008 Prediction 5.31 million units full year.
Yun "Interestingly, there have been reports of multiple bidding after the large price cuts, so it is possible that most of the price declines have already occurred in those markets."

08/08/2008 Prediction 5.51 million units full year.
Gaylord "buyers [will] get into the market to take advantage of the unprecedented drop in home prices in many areas, as well as a wide selection of inventory, to make an investment in their future,"

09/09/2008 Prediction 5.01 million units full year.
Yun "Nationally, home sales are stable now but are expected to increase in coming quarters."

10/08/2008 Prediction 5.04 million units full year.
Yun "What we’re seeing is the momentum of people taking advantage of low home prices…"

11/07/2008 Prediction 5.02 million units full year.
Yun "…we’re still in a broad period of stabilization"

12/09/2008 Prediction 4.96 million units full year.
Yun "Given the critical role of housing in an economic recovery, we’re confident sufficient (government) stimulus will be offered to bring more buyers to the market,"

1/06/2009 Prediction 4.90 million units full year.
Yun " With a proper real-estate focused (government) stimulus measure, home sales could rise more than expected, by more than 10 percent..."

Question of The Day - Employment at the Crossroads?

We are now standing at the most significant crossroads in this economic decline as we find out on Friday and over the following two months if the employment situation will follow a trend similar, albeit more severe, than the past two recessionary contractions OR if we are in for an entirely different type of recession.

If we see sequentially declining jobs numbers for December and then for January and February, we are likely in for a long and severe recession the likes of which virtually all current workers have never experienced resulting in a FAR more complex economic situation for the country.

The Challenger Job Cuts point to moderation in job losses while the ADP numbers point to a substantial deterioration for Friday’s results…

So, where are we headed?

Reading Rates: MBA Application Survey – January 07 2009

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages, 1 year ARMs as well as application volume for both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage increased 4 basis points since last week to 5.07% while the purchase application volume increased 7.26% and the refinance application volume declined 12.32% compared to last week’s results.

It’s important to note though that although the steady decline in mortgage rates has likely played a significant role in the large increases in refinance application volume, it’s also altogether possible that the MBAA has some difficulty in seasonally adjusting their numbers around the November and December periods.

As you can see on the charts below, November through January usually brings some erratic spikes to the volume indices but the cause, at least in some part, is likely the result of troubles seasonally adjusting a noisy weekly series and not an actual spontaneous doubling of refinance activity.

As was noted last year, it’s probably sensible to wait until February to draw a final conclusion.

The following chart shows how the principle and interest cost and estimated annual income required to cover the PITI (using the 29% “rule of thumb”) on a $400,000 loan has changed since November 2006.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages over the last number of weeks (click for larger version).


The following charts show the Purchase Index, Refinance Index and Market Composite Index since November 2006 (click for larger versions).

The Big Apple Goin’ Bust!

The recent article titled "What's in Store for Regional Banks" by fellow blogger and expert mortgage analyst Ira Artman is a superb example of macroeconomic and credit modeling and forecasting… I would encourage all to give it a good read.

Ira demonstrates very clearly that community banks in the New York and New Jersey metro area are likely facing a prolonged period of rising non-performing loan ratios regardless of the quality (or touted quality) of the bank’s “prime” loan portfolio or its management

What’s driving this "prime" mortgage portfolio stress is simple… significant unemployment and falling home prices.

Pending Home Sales: November 2008

Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for November showing a 5.3% year-over-year decline in pending home sales nationally firmly indicating that the widespread collapse of consumer confidence that resulted from the economic turmoil experienced in September thru November has worked to drive home sales back into a sustained decline.

It’s important to note that sales in the West region have deteriorated significantly since September falling another 2.4% on a month-to-month basis likely as a result of investors pulling back on purchases of foreclosed homes as it has become increasingly obvious that a bottom has not yet been reached in those markets and that prices are, in fact, headed lower.

As usual, NAR Senior Economist Laurence Yun continues his government bailout groveling while dishing up a whopping portion of self-interested spin suggesting that 2009 may bring a 10% increase in home sales.

“With a proper real-estate focused stimulus measure, home sales could rise more than expected, by more than 10 percent to 5.5 million in 2009, and easily begin to stabilize home prices in many parts of the country. Stable home prices will, in turn, lessen foreclosure pressures and lay the foundations for a solid economic recovery as the nation’s 75 million homeowners regain confidence,”

The following chart shows the national pending homes sales index since 2005 compared monthly. Notice that each year, the months value is decreasing fairly consistently (click for larger version).

The following chart shows the national pending home sales index along with the percent change on a year-over-year basis as well as the percent change from the peak set in 2005 (click for larger version).

Note that in the above charts, I had to use the Not Seasonally Adjusted (NSA) data series as NAR changed the methodology for their Seasonally Adjusted (SA) series a while back and never republished the numbers.

Look at November’s seasonally adjusted pending home sales results and draw your own conclusion:

• Nationally the index declines 5.3% as compared to November 2007.
• The Northeast region declined 14.6% as compared to November 2007.
• The Midwest region declined 10.1% as compared to November 2007.
• The South region declined 12.7% as compared to November 2007.
• The West region increased 19.3% as compared to November 2007.

2009 – Year of Unemployment, Foreclosures, Bankruptcies and the Vicious-Cycling “PRIME-Bomb!”

The New Year is getting the typical treatment in the business media…

The Bulls are making the rounds with tales of second half recoveries and silly “Dogs of the DOW” theories.

Many, including some of the most strident free marketeers, are holding out hope for successful government intervention and stabilization of private markets while the new administration, with likely the highest reserve of political capital seen in decades, appears eager to get right to work “fixing” our economy.

Yet, soon the reality will overtake us all again.

The economy is in a serious bind and as we discovered in 2007 and 2008, there are no easy solutions.

This year, I will refocus my attention on Unemployment and particularly unemployment driven foreclosure and personal bankruptcy activity while continuing to develop a theme I call the “PRIME-Bomb”, the explosive force that will be felt as the immense cohort of typical “prime” households (households with prime jumbo, prime piggyback and simply prime conforming loans) face historic financial pressures and go bust in record numbers.

2006 marked the first year of the housing decline affecting mostly home sales activity, home builder operations and decelerating home price appreciation.

2007 brought serious housing price depreciation, steep foreclosures for weak borrowers with the most toxic of loan products, the sub-prime collapse and finally the initial leg of the credit market turmoil and the start of the current recession.

2008 was a spillover year where the housing decline and the larger credit deleveraging and crunch sloshed over into virtually every market and business trouncing historic financial institutions and eventually leading to the first phase of the employment downturn, stock market collapse and severe consumption and macroeconomic deterioration.

2009, I believe, will likely bring the most fundamental decline to American households (and firms by viciously-cycling proxy) seen in the post-war period driving the economy far deeper into recession than most anticipate.

We are now on the verge of a profound shakeout of American households… a market clearing of sorts where millions of Americans that made considerable financial progress during the 90s and 2000s are forced back down the socio-economic ladder by the crushing force of a decelerating economy and, for many, their own, self-imposed, debt burdens.

The two main stimulants of this portion of the decline will be the continued increase of unemployment and the decline in home prices.

House prices will continue to decline throughout the year, especially on the east coast where many regional economies (Washington DC, New York, the New England states) are only just now beginning to experience truly stressful economic pressures.

East coast and West coast home price declines will, in effect, equalize as all regional areas push well above 7% unemployment forcing distressed properties to swell inventory levels and the sales pace to continue to slow.

As for unemployment, it’s important to consider that even if this downturn were to bring a “garden variety” unemployment spike, we would still expect at least two more complete years of increasing unemployment… unthinkable for many but reality nonetheless.

This bout of unemployment will prove to be a vexing situation to address as no amount of “shovel ready” work projects will help those who have never lifted a shovel.

We are now firmly a nation of service workers with 42% of all private non-farm jobs seated in “Information”, “Financial Activities”, “Professional Business Services” and “Education and Health Services”.

We will see in 2009 that a large and growing percentage of the population of highly specialized college educated professionals will require significant retraining in order to successfully reenter the workforce.

This extra complexity will slow the transition of workers into other productive capacities and work to drive a historically high rate of unemployment (my current model sees unemployment reach at least 10% by the peak) and place a rarely seen level of pressure on traditional public services like unemployment benefits and even food stamps.

Many will simply not survive financially.

Foreclosures and personal bankruptcies will soar throughout 2009 while consumption continues to erode thus spinning the vicious circle around toward firms with declining profits, declining stock values and record corporate bankruptcies and back again to unemployment.

Construction Spending: November 2008

Today, the U.S. Census Bureau released their November read of construction spending again demonstrating the significant extent to which private residential construction is contracting particularly for single family structures while non-residential spending continues to show the telltale signs of contraction.

With the tremendous weakening trend continuing, total residential construction spending fell 23.42% as compared to November 2007 and 51.47% from the peak set in March 2006.

Worse off though was private single family residential construction spending which declined 41.94% as compared to November 2007 and a truly grotesque 67.42% from the peak set in February 2006.

Non-residential construction spending, currently accounting for just under half of all private construction spending, has been expanding at a slower rate in recent months with November showing a 10.27% increase as compared to November 2007.

As was noted in prior posts, commercial real estate (CRE) appears to be coming under some pressure with reports of increasing vacancy rates and falling prices and now a back-to-back monthly decline in spending.

Keep your eye on the last two charts in the months to come for a clearer indication of a pullback.

The following charts (click for larger versions) show private residential construction spending, private residential single family construction spending and private non-residential construction spending broken out and plotted since 1993 along with the year-over-year and peak percent change to each since 1994 and 2000 – 2005.

Bernanke’s Nightmare?: Commercial Paper January 5 2008

Something has changed with Commercial Paper rates… either this is some portion of the Feds CPFF program kicking in or something else but the rates have come down dramatically in the last two reported days.

The spread now stands at 289 basis points… still wildly elevated but much better than the 615 of less than a week ago.

It will be interesting to see what unfolds….

Ticking Time Bomb?: Fannie Mae Monthly Summary November 2008

Decades from now the summer of 2008 will likely be remembered to mark the turning point where legislative blundering took an otherwise serious financial crisis and molested it into an epic financial collapse.

By fully assuming the liabilities of Fannie Mae and Freddie Mac, the two colossal and corrupt (and conduit of corruptness funneling junk Countrywide Financial loans onto the implied balance sheet of the federal government) government sponsored enterprises, the federal government, led by Treasury Secretary Paulson and Federal Reserve Chairman Ben Bernanke, has thrust taxpayers into an abyss of insolvency with one mighty shove.

Given the sheer size of these government sponsored companies, with loan guarantee obligations recently estimated by Federal Reserve Bank of St. Louis President William Poole of totaling $4.47 Trillion (That’s TRILLION with a capital T… for perspective ALL U.S. government debt held by the public totals roughly $4.87 Trillion) this legislative reversal making certain the “implied” government guarantee is reckless to say the least.

The following chart (click for larger) shows what Fannie Mae terms the count of “Seriously Delinquent” loans as a percentage of all loans on their books.

It’s important to understand that Fannie Mae does NOT segregate foreclosures from delinquent loans when reporting these numbers and that should they report the delinquent results as a percentage of the unpaid principle balance, things might likely look a lot worse.

Finally, the following chart (click for larger) shows the relative movements of Fannie Mae’s credit and non-credit enhanced (insured and non-insured) “Seriously Delinquent” loans.

Commercial Calamity? S&P/GRA Commercial Real Estate Index September 2008

Standard & Poor’s tracks commercial real estate (CRE) prices for various commercial property types.

Today’s results indicate that the commercial real estate decline has firmly arrived and it is notable with a marked decline for most components with three of the four now showing annual declines resulting in the third consecutive year-over-year decline to the total index, marking the first such decline in the indexes history.

It’s important to keep in mind that this decline is coming from data that was settled well in advance of the historic stock market and wider macroeconomic crisis which, in all likeliness, will result in significant additional downward pressure on commercial real estate prices.

Clearly, commercial real estate, having already matched and surpassed the level of decline seen after the dot-com bust, now sit poised on the verge of an unprecedented slump.

The charts below show the National index and the component indices since 1994 (click for larger).

NOTE: S&P has advertised that this particular index will now be discontinued… I’m following up with a phone call and will update this post with details.

In future months I’ll continue to post the MIT/CRE and Moody’s commercial property indices in order to get a sense of CRE market pricing conditions.