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  • Case-Shiller: Housing Prices Keep Rising

    Home prices continued to climb in February, according to the latest Case-Shiller Home Price Indices release. Average home prices rose 0.4% for the Case-Shiller 10-city and 20 city composite. On an annual basis, prices rose 8.6% for the 10-city composite index and 9.3% for the 20-city composite. Prices rose in 16 of the 20 top metro areas. Here's a look at the long term trend: From the release: “Home prices continue to show solid increases across all 20 cities,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “The 10- and 20-City Composites recorded their highest annual growth rates since May 2006; seasonally adjusted monthly data show all 20 cities saw higher prices for two months in a row – the last time that happened was in early 2005. “Phoenix, San Francisco, Las Vegas and Atlanta were the four cities with the highest year-over-year price increases. Atlanta recovered from a wave of foreclosures in 2012 while the other three were among the hardest hit in the housing collapse. At the other end of the rankings, three older cities – New York, Boston and Chicago – saw the smallest year-over-year price improvements. “Despite some recent mixed economic reports for March, housing continues to be one of the brighter spots in the economy. The 2013 first quarter GDP report shows that residential investment accelerated from the 2012 fourth quarter and made a positive contribution to growth. One open question is the mix of single family and apartments; housing starts data show a larger than usual share is apartments.” Read the full release here .

  • Case-Shiller: 'Home Prices Closed Out a Strong 2012'

    After dropping slightly in November, home prices gained again in December and had a strong finish to 2012, according to the latest S&P/Case-Shiller Home Price Indices release. Average home prices rose 0.2% for the Case-Shiller 10-city and 20 city composite. On an annual basis, prices rose 5.9% for the 10-city composite index and 6.8% for the 20-city composite. Only New York saw home prices fall on an annual basis. Here's a look at the long term trend: From the release: “Home prices ended 2012 with solid gains,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “Housing and residential construction led the economy in the 2012 fourth quarter. In December’s report all three headline composites and 19 of the 20 cities gained over their levels of a year ago. Month-over-month, 9 cities and both Composites posted positive monthly gains. Seasonally adjusted, there were no monthly declines across all 20 cities. “The National Composite increased 7.3% over the four quarters of 2012. From its low in the first quarter, it surged in the second and third quarter and slipped slightly in the 2012 fourth period. The 10- and 20-City Composites, which bottomed out in March 2012 continued to show both year-over-year and monthly gains in December. These movements, combined with other housing data, suggest that while housing is on the upswing some of the strongest numbers may have already been seen. “Atlanta and Detroit posted their biggest year-over-year increases of 9.9% and 13.6% since the start of their indices in January 1991. Dallas, Denver, and Minneapolis recorded their largest annual increases since 2001. Phoenix continued its climb, posting an impressive year-over-year return of 23.0%; it posted eight consecutive months of double-digit annual growth.” Read the full release here .

  • Case-Shiller: Month-to-month Price Drop, but 'Housing is Clearly Recovering'

    Home prices dropped slightly from October to November according to the latest S&P/Case-Shiller Home Price Indices release. Average home prices dropped 0.2% for the Case-Shiller 10-city composite and 0.1% for the 20 city composite. The 12-month picture looks much stronger. On an annual basis, prices rose 4.5% for the 10-city composite index and 5.5% for the 20-city composite. Here's a look at the long term trend: From the release, quoting David M. Blitzer , Chairman of the Index Committee at S&P Dow Jones Indices. “Winter is usually a weak period for housing which explains why we now see about half the cities with falling month-to-month prices compared to 20 out of 20 seeing rising prices last summer. The better annual price changes also point to seasonal weakness rather than a reversal in the housing market. Further evidence that the weakness is seasonal is seen in the seasonally adjusted figures: only New York saw prices fall on a seasonally adjusted basis while Cleveland was flat. Regional patterns are shifting as well. The Southwest – Las Vegas and Phoenix – are staging a strong comeback with the Southeast -- Miami and Tampa close behind. The sunbelt, which bore the brunt of the housing collapse, is back in a leadership position. California is also doing well while the northeast and industrial Midwest is lagging somewhat. Housing is clearly recovering. Prices are rising as are both new and existing home sales. Existing home sales in November were 5.0 million, highest since November 2009. New Home sales at 398,000 were the highest since June 2010. These figures confirm that housing is contributing to economic growth. " Read the full release here .

  • Case-Shiller: 'Sustained Recovery in Home Prices'

    Home prices did better than forecasters expected, but still dipped slightly in October. Average home prices dropped 0.1% in from September to October, according to the latest S&P/Case-Shiller Home Price Indices release. Home prices dropped in 12 of the 20 metro areas that make up the 20-city composite index. The twelve month picture, on the other hand, looks very strong. On an annual basis, prices rose 3.4% for the 10-city composite index and 4.3% for the 20-city composite. Here's a look at the long term trend: From the release, quoting David M. Blitzer , Chairman of the Index Committee at S&P Dow Jones Indices. “The October monthly numbers were weaker than September as 12 cities saw prices drop compared to seven the month before.” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “The five which turned down in October but not in September, were Atlanta, Dallas, Miami, Minneapolis and Seattle. Among all 20 cities, Chicago was the weakest with prices dropping 1.5%, followed by Boston where prices fell 1.4%. Las Vegas saw the strongest one-month gain with prices up 2.8%." “Annual rates of change in home prices are a better indicator of the performance of the housing market than the month-over-month changes because home prices tend to be lower in fall and winter than in spring and summer. Both the 10- and 20-City Composites and 19 of 20 cities recorded higher annual returns in October 2012 than in September. The impact of the seasons can also be seen in the seasonally adjusted data where only three cities declined month-to-month. The 10-City Composite annual rate of +3.4% in October was lower than the 20-City Composite annual figure of +4.3% because the two weaker cities – Chicago and New York – have higher weights in the 10-City Composite." “Looking over this report, and considering other data on housing starts and sales, it is clear that the housing recovery is gathering strength. Higher year-over-year price gains plus strong performances in the southwest and California, regions that suffered during the housing bust, confirm that housing is now contributing to the economy. Last week’s final revision to third quarter GDP growth showed that housing represented 10% of the growth while accounting for less than 3% of GDP." Read the full release here .

  • Case-Shiller: Housing Prices Continued to Rise in August

    Home prices continue to rise across the nation. Average home prices rose 0.9% in August, according to the latest S&P/Case-Shiller Home Price Indices release. Home prices rose in 19 of the 20 metro areas that make up the 20-city composite index--with prices declining 0.1% in Seattle. On an annual basis, prices rose 1.3% for the 10-city composite index and 2.0% for the 20-city composite. Here's a look at the long term trend: From the release, quoting David M. Blitzer , Chairman of the Index Committee at S&P Dow Jones Indices. “Phoenix continues to lead the home price recovery. It recorded its fourth consecutive month of double-digit positive annual returns with a +18.8% rate for August. Atlanta posted a -6.1% annual rate, however this is significantly better than the nine consecutive months of double-digit declines it posted from October 2011 through June 2012. Las Vegas’ annual rate finally moved to positive territory with a +0.9% annual rate of change in August 2012, its first since January 2007. “The sustained good news in home prices over the past five months makes us optimistic for continued recovery in the housing market. “News on home prices confirms other good news about housing. Single family housing starts are 43% ahead of last year’s pace, existing and new home sales are also up, the inventory of homes for sale continues to drop and consumer mortgage default rates are reaching new lows. Further consumer confidence continues to rise. Even as we end the seasonally strong home buying period, the statistics are positive. For the fifth time in a row, both Composites had monthly gains. Home prices in Seattle fell modestly in August, but other than that the 20 cities have also seen home prices generally improve since April.” Read the full release here .

  • Case-Shiller: Home Prices Continued Rebound in July

    **Correction . We previously posted that "On an annual basis, prices dropped 0.6% for the 10-city composite index and 1.2% for the 20-city composite." Prices rose 0.6% and 1.2%** Average home prices rose 1.6% in July, according to the latest S&P/Case-Shiller Home Price Indices release. Home prices rose in 15 of the 20 metro areas that make up the 20-city composite index. Prices dropped in Cleveland, Detroit and New York. On an annual basis, prices rose 0.6% for the 10-city composite index and 1.2% for the 20-city composite. Here's a look at the long term trend: From the release, quoting David M. Blitzer , Chairman of the Index Committee at S&P Dow Jones Indices. “The news on home prices in this report confirm recent good news about housing. Single family housing starts are well ahead of last year’s pace, existing home sales are up, the inventory of homes for sale is down and foreclosure activity is slowing. All in all, we are more optimistic about housing. Upbeat trends continue. For the third time in a row, all 20 cities and both Composites had monthly gains. Stronger housing numbers are a positive factor for other measures including consumer confidence. “Among the cities, Miami and Phoenix are both well off their bottoms with positive monthly gains since the end of 2011. Many of the markets we follow have seen some decent recovery from their respective lows – San Francisco up 20.4%, Detroit up 19.7%, Phoenix up 17.0% and Minneapolis up 16.5%, to name the top few. These were some of the markets that were hit the hardest when the housing bubble burst in 2006. The 10-City has increased 7.4% and the 20-City 7.8% since their recent lows. The positive news in both the monthly and annual rates of change in home prices over the past few months signals a possible recovery in the housing market.” Read the full release here .

  • RealtyTrac's Midyear 2012 Foreclosure Market Report

    After a slowdown in late 2011, foreclosure filings are picking up again. The number of US properties with at least one foreclosure filing rose in the first half of 2012, according to RealtyTrac 's Midyear 2012 Foreclosure Market Report . Foreclosed properties rose 2% over the second half of 2011. But foreclosure filings are down 11% against the first half of 2011. Here's a look at the trend: Daren Blomquist , Vice President at RealtyTrac, shares the top takeaways from the report here: Read the full report from RealtyTrac here .

  • Home Builders' Rising Confidence

    There may be a lot of unsettled foreclosures, and a lot of homeowners under water, but one key group keeps feeling better and better about the housing market. Home builders. The NAHB/Wells Fargo Housing Market Index has reached its highest level in four years. The index is now at 29, up from 25 in January. That's the fifth consecutive month home builder confidence has risen, according to the National Association of Home Builders . From the NAHB release: “Builder confidence has doubled since September as measured by the HMI,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “Given the recent improvements in new home starts and the increasing number of markets included in the NAHB/First American Improving Markets Index, this consistency suggests that the housing market is moving toward more sustainable growth.” Rutenberg cautioned that the housing sector remains very fragile with significant differences between individual markets, and said policymakers must guard against actions that could impede or even reverse the gains of recent months. “This is the longest period of sustained improvement we have seen in the HMI since 2007, which is encouraging,” said NAHB Chief Economist David Crowe. “However, it is important to remember that the HMI is still very low, and several factors continue to constrain the market. Foreclosures are still competing with new home sales, and many builders are seeing appraisals come in at less than the cost of construction. Additionally, prospective home buyers are finding it difficult to qualify for a mortgage.” Read the full release here .

  • Scott Shane: 4 Reasons for Small Business Pessimism

    For all the talk of the US economy rebounding, many small business owners continue to feel left behind by any recovery. Scott Shane , Professor of Entrepreneurial Studies at Case Western Reserve University, sees little in the present economic situation or in the near future that suggests small business owners have much to be happy about. Writing at Small Business Trends , Shane gives four reasons small business owners feel left behind. First, the housing market woes have a greater impact on smaller businesses: Moreover, small business financing depends a lot on housing prices. Big public companies obtain the capital that they need by issuing bonds and stock and selling them to investors, but small businesses rely heavily on personally guaranteed and personally borrowed money from banks. Analysis I conducted with my colleague Mark Schweitzer of the Federal Reserve Bank of Cleveland shows that the fall in housing prices has eliminated almost $25 billion in potential credit for small business owners. Second, big businesses can better take advantage of the more robust economic growth occurring in other countries. Small Business Administration data shows that small businesses only account for 31 percent of exports but generate more than half of non-agricultural private sector GDP. The lesser reliance of large businesses on economic conditions within the country has worked to their advantage in recent months. Third, increase in government regulation, as seen in the financial and health care reform bills have imposed a disproportionately large burden on small businesses. In a recent paper, Nicole and Mark Crain of Lafayette University wrote that “small businesses face an annual regulatory cost … which is 36 percent higher than the regulatory cost facing large firms.” Fourth, most government policies to combat the weak economic conditions have helped lar ge companies more than small ones. For instance, the stimulus program, which worked in part through government contracting, favored large businesses that knew how to work the public contracting system. Read Is Small Business Prosperity Just Around the Corner? here .

  • Wharton's Wachter on the Shaky Housing Market

    The housing market in the US continues to take its lumps. Prices are down, but buyers have not responded. Susan Wachter , real estate professor at the Wharton School , recently spoke about the state of the housing market in a Knowledge@Wharton interview. Wachter doesn't think we're going to see prices drop even more, but she does expect the slump to continue. She uses the phrase "bouncing along the bottom" to describe what she expects for housing as long as the recovery continues at its current slow pace.

  • 'Bet Against The American Dream'

    The folks at Planet Money and This American Life have been working with Pro Publica on an investigation into a hedge fund called Magnetar. Magnetar, apparently, made a lot of money by betting on a housing market collapse. The findings of the investigation, and the whole story of Magnetar, will be on this week's This American Life. But while we wait for the whole show, we have this musical number, written for the broadcast by Robert Lopez (of Avenue Q): 'Bet Against The American Dream' from Planet Money on Vimeo . Read more about the recording here .

  • GEC Impact on the Housing Market

    Yesterday we saw the grim numbers on housing starts and construction: a near 50 percent drop in new construction from March 2008 to March 2009. The problem with housing now in the US is twofold, according to Wharton School professor Joseph Gyourko : we built too much, and having negative demand shock. Or to put it another way, "we overbuilt it, and then we had a big recession." In this excerpt of his lecture before a new course at Wharton, The Economic & Financial Crisis: Causes, Consequences, and Policy Options , Gyourko discusses the supply and demand imbalance in the housing market, and how that is likely going to get worse in a recession: