The Real Estate Grab

With home prices tumbling again, now near 2002 levels, should you pounce on a new home before prices go back up?

That seems to be the question vexing many a home owner.

If you read the WSJ you might already by on the phone with your realtor. They say “a consensus is forming that home sales and construction are at long last bottoming and may soon rise. Economists largely expect this week’s numbers to affirm that notion.”

And on Fast Money's Halftime Report both OptionMonster Jon Najarian and Jared Levy of Peak 6 Investments echoed those same sentiments. " I think this is capitulation in Case-Shiller," Levy said.

"It seems to me the move higher in the housing sector stems from a belief that the worst news is now out there," added Najarian. The data from the Case-Shiller Index was so bad – I think investors are asking themselves how much worse can it get.

S&P/Case-Shiller Home Price Indices

Atlanta 106.65 -2.5% -3.2% -15.3%
Boston 148.77 -1.3% -1.5% -7.2%
Charlotte 118.94 -1.6% -1.2% -9.4%
Chicago 126.30 -3.4% -4.6% -17.6%
Cleveland 97.76 -5.0% -2.2% -8.5%
Dallas 112.39 -0.3% -2.5% -4.5%
Denver 120.22 -1.7% -2.7% -5.7%
Detroit 74.60 -3.8% -4.2% -23.6%
Las Vegas 121.06 -3.6% -4.4% -31.7%
Los Angeles 163.16 -2.0% -2.8% -24.1%
Miami 154.28 -3.0% -3.6% -29.5%
Minneapolis 116.39 -3.1% -4.8% -20.3%
New York 178.16 -1.6% -1.4% -10.2%
Phoenix 111.89 -4.5% -5.5% -35.2%
Portland 150.88 -1.9% -3.0% -14.4%
San Diego 146.82 -1.0% -2.6% -22.9%
San Francisco 120.39 -3.3% -4.4% -31.0%
Seattle 152.12 -1.5% -3.6% -15.4%
Tampa 145.25 -2.7% -4.4% -23.0%
Washington 168.02 -2.3% -2.0% -19.2%
Composite-10 154.70 -2.1% -2.6% -18.8%
Composite-20 143.17 -2.2% -2.8% -18.6%
Source: Standard & Poor's and Fiserv Data through February 2009

Source: Standard & Poor's and Fiserv
Data through February 2009

However, Barry Ritzholz of Fusion IQ sees the situation differently. He told Fast Money although it's true that "on average housing prices on a national basis are down to almost 2002 levels,” that's not the whole story.

The housing market is all about affordability. And because it’s much harder to get a mortgage and banks want more money down, “the pool of possible buyers is much smaller than it was in 2002." As a result he thinks prices have further to slide.

If this isn't the bottom, then where are we?

“Right now we’re probably in the 7th inning," says Ritzholz. "We need prices to normalize, so that more people can afford homes,” he says. Until that happens, housing probably won't go higher.

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Trader disclosure: On May 26th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Terranova Owns (ABT), (GENZ), (TER), (XBI), (JOYG), (IBM), (BRCM); Terranova Owns July Nat Gas Futures; Terranova Owns July Crude Futures; Terranova Owns June Gold Futures; Terranova Is Short (XOM) Call Spread ; Terranova Owns (DIS) Call Spread; Finerman Owns (RIG), (TBT); Finerman's Firm Owns (TBT), (CSCO), (PBR), (RIG), (CSCO), (NOK); Finerman's Firm Owns (WFC) Preferred; Finerman's Firm Owns (BAC) Preferred; Finerman's Firm Is Short (BAC); Finerman's Firm Is Short (WFC); Finerman's Firm Own 30-Year Treasury Puts; Seymour Owns (APPL), (BAC), (BX), (INFY), (F), (FXI), (EEM), (TTM), (CAT)