Home prices up, but growth rate slows

[lora001]

NEW YORK (CNNMoney.com) -- Home prices have risen for five straight months, but the rate of growth has slowed, according to an industry report released Tuesday.

Prices inched up 0.6% in July compared with June, according to S&P/Case-Shiller 20-city home price index. On a year-over-year basis, prices rose 3.2% compared with July 2009.

Experts polled by Briefing.com had forecast a year-over-year rise of 3.3%. S&P's 10-city index has gained 4.1% over that period.

The weak readings reveal the ongoing strife in housing markets. Sales of both new and existing homes are well below the the standards set during the housing boom years. New home sales have been running at or near record lows.

"Anyone looking for home prices to return to the lofty 2005-2006 levels might be disappointed," said David Blitzer, spokesman for Standard and Poors. "Judging from the recent behavior of the housing market, stable prices seem more likely."

Half the 20 cities have recorded gains over the past year, led by San Francisco, where prices have risen by 11.2%.

Las Vegas is the only market to have hit a new low during July. Prices there fell 0.8% from a month earlier and were down 4.9% from 12 months ago. The loss from the price peak, set in August 2006, was 57%.

 

[Neubarth]

The report is essentially a statement that home prices are still on the bottom with almost no movement.

Remember when home prices fall by Fifty percent, they have to rise 100 percent to get back to where they were. Consequently, a Three percent improvement in home prices is the equivalent of a 1.5% decrease in price. And, both fall into the category of marginal fluctuation.

Only the Government would try to mislead the public with a news release like that.

 

[loosecannon]

The report is essentially a statement that home prices are still on the bottom with almost no movement.

That's a good thing. Did you seriously expect housing prices were gonna rebound back into the bubblesphere?

 

[waltky]

Home prices still too high...

Home prices: The double-dip is near
March 3, 2011 -- That big sucking sound you heard last week? That was the air being taken out of the housing market by a slew of bad reports followed by some dire predictions by an industry bubble-spotter.

On Tuesday, we found out that home prices were near their post-bust lows. Two days later the government reported that January saw a double-digit dip in the number of new homes sold. Then Robert Shiller, the Yale economist and co-founder of the S&P/Case-Shiller home price indexes, dropped this bomb: "There's a substantial risk of home prices falling another 15%, 20% or 25%," he said.

That's a stunning enough pronouncement to make house hunters consider putting purchases on hold. And that may not be a dumb move: If prices are near a double dip -- meaning they fell after the bust, rose a bit during recovery and are now heading back down -- there may be better deals ahead. "There will be differences by market, but generally, you may get a big discount by waiting a year [to buy]," said Dean Baker, co-director of the Center for Economic and Policy Research, who thinks the price drop will be closer to 10% or 15%.

Baker looks at the ratio between local home prices and annual rents to judge whether markets are overvalued. If the median-priced home sells for more than 15 times the median annual rent, there's a good chance prices may come down. On a national level, Shiller and other economists compare home price changes with income growth over the years. Before the bust, home prices had been outpacing earnings since the late 1990s.

Just to get that back to a normal ratio -- which we last saw in 1998 -- home prices would have to drop another 15%, according to Anthony Sanders, a director of Real Estate Entrepreneurship at George Mason University. "Even after the bubble burst, the ratio of income to home prices is still way too high," he said.

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[william the wie]

Reversion to the mean generally involves:

A drop below the longrun trendline or a minimum of another 25% drop.

A market clearing price and that will be spotty as those who can move to lower cost of living states.

Just too much supply chasing too little demand.