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Why Home Prices Are Rising Again (According to Case-Shiller)

The Wall Street Journal June 26

As usual, I am following major Real Estate news and here is an interesting article from the Wall Street Journal from the end of June. It wasn’t hard to see this coming: Home prices rose in April after a spring that brought more buyers chasing fewer homes. Home prices typically show a seasonal gain in April, and Tuesday’s report from the S&P/Case-Shiller index was no different. Home prices were up 1.3% from March for the 20-city index. After adjusting for seasonal factors (more homes generally sell in April), prices were up by 0.7%.

This year was clearly better than April 2011, when monthly prices rose by 0.7%, and when adjusting for seasonality, they fell by 0.1%.

It’s worth remembering that Case-Shiller is a very backwards looking gauge of home prices… Still, the next few reports should be even better, and not just for the normal seasonal reasons:

First, the number of homes for sale has been much lower this year than in the past few years, even though demand has returned to levels last seen in 2010, when tax credits boosted demand and sent prices up. The function of falling supply and rising demand means prices are already going up in more markets. (We wrote about this in April in a piece about the return of “bidding wars” for a handful of markets.)

Second, the share of homes selling out of foreclosure has fallen. This “distressed share” is important for home-price indexes that measure repeat sales, such as the Case-Shiller index.

Read the full article here: Wall Street Journal blog

Monday, July 30th, 2012 at 5:25 am and is filed under buying property in usa, NEWS. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.