Today, we’re becoming more constructive on near-term prices. In fact, we wouldn’t be surprised to see a decent upward move in the popular Case-Shiller indexes in the very near future. Figure 1 shows that listing prices in the index have already started a rebound after a horrendous December.

Over the Worst?
So what gives us hope the intermediate term may yield a more stable picture than the past several years? Mainly that new supply injected into the market over the past several years has been so constricted there’s likely significantly fewer surplus homes in existence today. Sound absurd? Well, Figure 2 shows the degree to which actual new housing has been curtailed over the past several years.

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