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Business Title: Home Prices in U.S. Cities Up 3.8% From Year Earlier Home prices in 20 U.S. cities rose in April from a year earlier as sales got a boost from a tax credit aimed at reviving the industry that triggered the worst recession since the 1930s. The S&P/Case-Shiller index of property values climbed 3.8 percent from April 2009, the biggest year-over-year gain since September 2006, the group said today in New York. The increase exceeded the median forecast of economists surveyed by Bloomberg News. The end of a government homebuyer incentive worth as much as $8,000, mounting foreclosures and unemployment near a 26-year high threaten to set real estate prices back following the stabilization that began earlier this year. Eroding home equity may limit household spending, the biggest part of the economy, even as gains in income help underpin demand. “We’re done with the big downward plunge in prices,” Omair Sharif, an economist at RBS Securities in Stamford, Connecticut, said before the report. Even so, “prices have come off so significantly from the peak that we don’t expect to see big gains this year. Since the tax credit pulled activity forward, sales will drop for the next few months.” Stock-index futures held earlier losses after the report on growing concern over the outlook for global growth. The contract on the Standard & Poor’s 500 Index dropped 1.2 percent to 1,058 at 9:02 a.m. in New York. Treasury securities rose, sending the yield on the benchmark 10-year note down to 2.99 percent from 3.02 percent late yesterday. Median Forecast The home-price index was forecast to rise 3.4 percent after a year-over-year increase of 2.3 percent for March, according to the median forecast of 26 economists surveyed. Estimates ranged from 1.3 percent to 4.1 percent. Year-over-year records began in 2001. The gauge climbed 0.4 percent in April from the prior month after adjusting for seasonal variations following a March decrease of 0.2 percent. Unadjusted prices increased 0.8 percent from the prior month. The year-over-year gauge provides better indications of trends in prices, the group has said. The panel includes Karl Case and Robert Shiller, the economists who created the index. Eleven of the 20 cities in the S&P/Case-Shiller index showed a year-over-year increase, led by an 18 percent gain in San Francisco. Las Vegas showed the biggest year-over-year decrease, with prices falling 8.5 percent. Broad-based Gains Compared with the prior month, 18 of the 20 areas covered showed an increase on an unadjusted basis, led by a 2.4 percent gain in Washington and a 2.2 percent increase in San Francisco. Miami and New York were the only two cities showing a monthly decrease. “Inventory data and foreclosure activity have not shown any signs of improvement,” David Blitzer, chairman of the index committee at S&P, said in a statement. “Consistent and sustained boosts to economic growth from housing may have to wait to next year.” Builders from KB Home to Lennar Corp. and Toll Brothers Inc. are reporting falling sales after the extended tax credit for homebuyers expired. To qualify, buyers had to sign contracts by April 30 and must close transactions by June 30. Los Angeles-based KB Home, which targets first-time buyers, reported a wider-than-estimated loss for the quarter ended May 31 as new orders declined 23 percent and the average price for its houses fell 4 percent from a year ago. Credit Ended “Homebuyers who missed the deadline seemed to step out of the market completely,” KB Home Chief Executive Officer Jeffrey Mezger said in a June 25 conference call with analysts. It’s too early in the third quarter to forecast demand, he said. “It’s a matter of when, not if, things are going to improve,” Mezger said. The S&P Supercomposite Homebuilder Index, which includes Toll and Lennar, has dropped 28 percent since reaching a 19- month high on May 3. The broader S&P 500 Index is down 12 percent from April 23’s 19-month peak. There is little consensus on the outlook for property values. About half of 106 U.S. forecasters in a study published June 23 by MacroMarkets LLC expect price declines in 2010 and half anticipate either little-change or increasing values. Purchases of new homes plunged by a record in May from the prior month, and the median price declined from a year earlier to the lowest level since December 2003, Commerce Department data showed. The National Association of Realtors reported a drop in May sales of existing houses. Foreclosures may be an obstacle for the market for much of the year. More than a fifth of U.S. mortgage holders owed more than their homes were worth in the first quarter, Seattle-based Zillow.com said last month.
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#1. To: Brian S (#0)
Yeah...right. And nobody is buying them.
News Update: Owe-bama ordered eggs and toast for breakfast. ABC/NBC/CBS/MSNBC/CNN all agree the decision to avoid bagels was 'Brilliant!' (eyes rolling)
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