Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights the Case-Shiller index and consumer confidence.
- The November reading of the Case-Shiller index was released this morning which covers the three months of September, October and November. The non-seasonally adjusted 20-city index eased 1.3% from October to November, the third consecutive month of decline. On a year-over-year basis, the gap expanded to 3.7% from 3.4% in October.
- Only one MSA, Phoenix, showed an increase relative to the three months ending in October. The year-over-year price gab expanded in 13 of the 20 metros tracked and only two, Washington and Detroit, are positive relative to November of 2010. Since the Case-Shiller index incorporates data for the three months of September, October, and November, today’s measure does not reflect the more recent price trend that showed up in NAR’s January release. The index has remained relatively flat since 2009.
- Consumer confidence eased 3.7 points in January from December. The majority of the decline was concentrated in the present index which tumbled 8.1 points to 38.4, while the expectations index was nearly unchanged. Consumers generally were more pessimistic on current business and highering conditions. The trend for confidence is important and remains 40% higher than October’s low.
- Today’s release of the Case-Shiller index points to a late 2011 expansion of the year-over-year price gap. This pattern may reflect sharper discounts on distressed properties which was observed in the October and November Existing Home Sales releases from NAR, but a much smaller gap developed in the December NAR release. Look for a muted improvement in next month’s reading of the Case-Shiller index as the December improvement will be average with the trends from October and November. Three consecutive months of steady improvement in consumer confidence ended in January, but consumers remain confident about the future despite weaker current conditions. Improved confidence could boost demand for housing and stymie the flow of delinquencies, but employment is key to the recovery and sustained weakness there could undermine the gains in consumers’ expectations.
I have witnessed 38 years of ups and downs and the market since mid February feels like a more, yet new normal. Buyers still have the best value market ever but the inventory in starter home markets are competitive. I see less shorts as banks start to figure out selling as a partner to home owners verses foreclose and sell. I see this lowering the foreclosed homes coming on the market which will help home prices solidify. This in turn will boost consumer confidence bringing more buyers to the market. In summary I feel we are finally at a more consistant new but real normal market.Consumers really have always purchased homes, first for shelter and comfort but in most cases assumed some increase over time. If you look at a chart i received recently showing home values from 1890 to present , there have beenvalues go up and down over time before. Two important notes I see are 1.The market appears to have bottomed out at least in most markets and 2. If you look at most markets from 2000 to present to present, a homeowner buying in 2000 and still owning the same home has gained a net increase in the value of their home. we need to let buyers and sellers know that long term home ownership is a good value as well as peace of mind of controlling where you live. Have a good day and enjoy the dance everyone.
I have witnessed 38 years of ups and downs and the market since mid February feels like a more, yet new normal. Buyers still have the best value market ever but the inventory in starter home markets are competitive. I see less shorts as banks start to figure out selling as a partner to home owners verses foreclose and sell. I see this lowering the foreclosed homes coming on the market which will help home prices solidify. This in turn will boost consumer confidence bringing more buyers to the market. In summary, I feel we are finally at a more consistant new but real normal market.Consumers really have always purchased homes, first for shelter and comfort but in most cases assumed some increase over time. If you look at a chart I received recently showing home values from 1890 to present , there have been values go up and down over time before. Two important notes I see are 1.The market appears to have bottomed out, at least in most markets and 2. If you look at most markets from 2000 to present, a homeowner buying in 2000 and still owning the same home has gained a net increase in the value of their home. We need to let buyers and sellers know that long term home ownership is still a good value as well as giving peace of mind of controlling where you live. Have a good day and enjoy the dance everyone.