Great news for the U.S. real estate market is few and far between. However, there is a scant glimmer of hope amid the doom and gloom. Believe it or not, home values are increasing. They are for the last few months. The Case Shiller Price Index monitors home prices across 20 U.S. cities. Homes sold from the end of May to the end of June 2010 had a gain in rates, and the two months before did too. There aren’t a lot of optimistic assumptions that are being made about real estate these days, so it is a welcome change to hear very good news.
Just how are house prices going up?
Standard and Poor’s Case Shiller price index, which tracks real estate activity in 20 cities, has showed a gain in home prices within the second quarter of 2010. Home prices increased by 4.4 percent, as outlined by the New York Times, over second quarter of 2010. Last quarter, prices had a 2.8 percent drop. The increase is also for the whole year. Second quarter 2010 home prices are up 3.6 percent compared to second quarter of 2009. Costs rose 1 percent during July.
What is the catch
Along with the rise in home prices, sales are trending downward. The homebuyer tax credit helped to spur home sales, but once the credit expired sales began to drop off. Home prices are likely to fall soon, as well. Nevertheless, not all is lost. Karl Case, the economist who the index is named for, as outlined by Bloomberg, thinks there are some positives within the new data. Case believes that the market is going to take one more year or so before it stabilizes and begins to improve.
Not really the most detrimental media ever
The homebuyer tax credit was only a finger in the dam. It provided an artificial and only momentary boost to house sales and the cost of homes. A truer state of the market can’t really emerge until governmental encumbrance has been removed. However, on the plus side, things are better than they were a year ago.
Further reading
Bloomberg
bloomberg.com/news/2010-08-31/karl-case-sees-a-lot-of-positive-stuff-in-housing-price-data-tom-keene.html
NY Times
nytimes.com/2010/09/01/business/economy/01econ.html?partner=rss and emc=rss
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