After endless bad news and staggering stats in the national real estate sector, the silver lining has finally appeared, giving the industry a small glimmer of hope that all is not lost- according to the S&P/Case-Shiller home price index released today, home prices rose 3.6% over the last twelve months.
Home prices rose 4.4% in the second quarter after a 2.8% dip in the first quarter but there are no signs as to whether a rise will continue. Economists and industry insiders are not jumping for joy however, and gains are not expected to be seen industry wide for some time (although there is no consensus as to when a recovery will take place).
There is also no consensus as to whether or not the flailing real estate sector is due to the expiration of the home buyer tax credits, nor a consensus as to whether the Obama administration or the Bush administration is to blame.
Home prices month in all 20 metro areas tracked by the S&P rose slightly except for Las Vegas which dipped another 5.2%. Year over year prices performed especially well in San Francisco with a 14.3% increase, San Diego up 11.2% and Minneapolis up 10.7% over last year.
Signs are up and signs are down and the real estate industry is still very much in flux with pockets of underperforming and overperforming markets with a mostly stagnant national outlook. What is the market like in your city?
Jeff Belonger
August 31, 2010 at 10:18 pm
Tara.. as loan officer that has done loans up and down the east coast in the past, I see different markets. It’s still not stable in many, but some are flourishing now. I know that doesn’t help much, but in the south Jersey area, it’s been down a little. I need to find the stats. But I will say this.. the homebuyers tax credit was just a lot of fluff. I have written about this and in my opinion … and from talking to several other good professionals, I only saw that tax credit helping the market by an extra 4% to 8%, if that… meaning, many were going to buy in the year or end of the year anyhow.. And that this was false stimulation of the economy.. that it was artificial stimulation. Not what we really needed, when many thought it would help no matter what.
I think no matter how you look at these numbers or such numbers that you have mentioned, that it will still take over 2 to 3 more years to recover some…. and that we need to focus on jobs and small businesses, and then real estate will fall into place. Again, just my opinion… But yes, some areas are showing 10% increases, which is a good start, but a lot more work ahead. thanks
Ruthmarie Hicks
September 1, 2010 at 1:38 am
Some areas are having a mini-boom with low inventories. I live just outside of NYC…it appears that the Wall Street casinos are back in operation – the uptick is in what we would call the “money towns” and at the upper end of the price spectrum. Go figure.
Fred Romano
September 1, 2010 at 12:15 pm
This is a joke! The only reason home prices were up is because sellers were taking advantage of the ridiculous buyer tax credit. That artificially created some demand, so sellers monopolized on that. Simple… You will see the next quarter report show a huge dip… NO silver lining folks, Sorry.
Liz Benitez
September 1, 2010 at 2:26 pm
It is hard to trust in the numbers Tara. There are so many reports that contradict each other. I think Teresa Boardman had it right in “Riding the great recession roller coaster” We are on an up and down ride, no mater what the reports say.
Greg Lyles
September 2, 2010 at 12:06 pm
Lies, damned lies and statistics. Which do you believe? Unless they are looking at individual homes that resell every few months, it’s almost impossible to make a broad brush statement like home prices being up.
For example, lots of people look at the rise or fall in median home prices sold during a month. Meaningless. That equivalent to randomly selecting 25 people at the mall, measuring their height, and taking the median. Then, the next 25 people selected at random the following month may have a median height just slightly higher. That doesn’t mean the population is getting taller, it just reflects the difference in the sample taken.
If the median price went up in one month, it could be that sellers of more expensive homes reduced their price low enough to finally sell. I’m pretty sure you couldn’t convince them that things were getting better!
Sheila Rasak
September 2, 2010 at 9:38 pm
We’ve got one problem that I see on the horizon and that’s the latest news that the Obama administration is not considering any buyer incentives to create any new activity. That being said, the consumer now needs to understand that interest rates are once again at an all time low and that should be incentive enough to jump into the game. I think it might take a little getting use to the fact that we can’t have everything recovered overnight by this administration and low interest rates and affordability is what we are currently working with.
Bottom line? If you’ve got the down payment, have good credit, and are still stalling because you’re thinking you’re going to get something more, you’re running the risk of anything upsetting a good apple cart.
Great opportunities are out there and 75% of my listings have been sold to all cash buyers wanting to take advantage of the tax credit with the other 25% wanting to take advantage of low interest rates and housing they can finally afford.
Glenn in Naples
September 3, 2010 at 1:43 pm
If one speaks with an economist they will generally tell you that an index used to measure home prices usually lags behind what is usually happening. So In this instance, home values could be in decline and will be reflected in a later report. You make figures and stats out to be favorable to one’s argument.
Bob Wilson
September 5, 2010 at 5:13 pm
Sorry, but no silver lining, and neither Case or Shiller point to one.
The very real concern is a double dip.
icis.com/Articles/2010/08/31/9389520/us-housing-sector-may-be-heading-for-double-dip-recession.html