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In what has become the msm mantra, everything but lower pricing is seen as the hope for housing.... Lower pricing....baaaad. Affordable pricing...baaaad. Balloon pricing....goooood
December 30, 2009
Slight Rise in Home Prices Masks Signs of Weakness
By DAVID STREITFELD
Home prices rose modestly in October but beneath the apparent good news were some disquieting signs of deterioration. Analysts expect prices this winter to resume their descent, putting fresh pressure on the fragile economy.
The Standard & Poor’s/Case-Shiller home price index, a widely watched measure of housing markets in 20 metropolitan areas, rose 0.4 percent from September on a seasonally adjusted basis.
It was the fifth consecutive month that prices were up, but the rate of increase has dropped sharply from the impressive gains of the summer. Analysts said the government’s extensive and expensive effort to prop up the market was showing signs of fatigue.
A tax credit for first-time buyers has been extended until spring, but the urgency that buyers showed this summer is draining away. The Federal Reserve has pushed down rates to the lowest level in decades, but says that program will end by March 31.
Fannie Mae and Freddie Mac, the government-controlled mortgage giants, are tightening their policies for loans in their portfolio. That is making lenders who sell their mortgages to Fannie and Freddie even more skittish about extending credit to new buyers.
The Federal Housing Administration, which has become an important part of the entry-level housing market, is expected to tighten its standards in the next few weeks. That would further crimp the pool of eligible buyers.
Meanwhile, foreclosures are continuing to affect the market, and credit remains tight.
Put all these elements together, said Dan Greenhaus, chief economic strategist for Miller Tabak and Company, and “it is more than likely that prices have a bit further to fall.”
Case-Shiller adjusts its numbers for seasonal variations. This tends to hide any weakness in the cooler months, when fewer houses are sold.
On an unadjusted basis, the index was flat in October.
“We’ve started to see the possibility of either a leveling off of prices for a few months or perhaps a double-dip,” said Maureen Maitland, the vice president for index services at S.& P.
The Case-Shiller index is down 7.3 percent from October a year ago and is off 29.5 percent from its peak.
Prices fell or were flat in nine of the 20 cities surveyed in October, the same as in September. But the recovery is beginning to diverge sharply by metro area, Wells Fargo’s chief economist, John Silvia, noted.
In the last three months, prices in San Francisco increased at an annual rate of 25 percent while Minneapolis was up 17 percent and Los Angeles rose 11 percent. Phoenix, long a laggard, rose 13 percent.
But New York, Portland, Ore., and Boston were up less than 2 percent.
Las Vegas, the epicenter of the housing crash, shows no signs of recovery. Prices have fallen there for 38 months, and are now barely above the level at which they began the decade.
http://www.nytimes.com/2009/12/30/bu...30econ.html?hp
December 30, 2009
The Standard & Poor’s/Case-Shiller home price index, a widely watched measure of housing markets in 20 metropolitan areas, rose 0.4 percent from September on a seasonally adjusted basis.
It was the fifth consecutive month that prices were up, but the rate of increase has dropped sharply from the impressive gains of the summer. Analysts said the government’s extensive and expensive effort to prop up the market was showing signs of fatigue.
A tax credit for first-time buyers has been extended until spring, but the urgency that buyers showed this summer is draining away. The Federal Reserve has pushed down rates to the lowest level in decades, but says that program will end by March 31.
Fannie Mae and Freddie Mac, the government-controlled mortgage giants, are tightening their policies for loans in their portfolio. That is making lenders who sell their mortgages to Fannie and Freddie even more skittish about extending credit to new buyers.
The Federal Housing Administration, which has become an important part of the entry-level housing market, is expected to tighten its standards in the next few weeks. That would further crimp the pool of eligible buyers.
Meanwhile, foreclosures are continuing to affect the market, and credit remains tight.
Put all these elements together, said Dan Greenhaus, chief economic strategist for Miller Tabak and Company, and “it is more than likely that prices have a bit further to fall.”
Case-Shiller adjusts its numbers for seasonal variations. This tends to hide any weakness in the cooler months, when fewer houses are sold.
On an unadjusted basis, the index was flat in October.
“We’ve started to see the possibility of either a leveling off of prices for a few months or perhaps a double-dip,” said Maureen Maitland, the vice president for index services at S.& P.
The Case-Shiller index is down 7.3 percent from October a year ago and is off 29.5 percent from its peak.
Prices fell or were flat in nine of the 20 cities surveyed in October, the same as in September. But the recovery is beginning to diverge sharply by metro area, Wells Fargo’s chief economist, John Silvia, noted.
In the last three months, prices in San Francisco increased at an annual rate of 25 percent while Minneapolis was up 17 percent and Los Angeles rose 11 percent. Phoenix, long a laggard, rose 13 percent.
But New York, Portland, Ore., and Boston were up less than 2 percent.
Las Vegas, the epicenter of the housing crash, shows no signs of recovery. Prices have fallen there for 38 months, and are now barely above the level at which they began the decade.
http://www.nytimes.com/2009/12/30/bu...30econ.html?hp
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