Posted on 02/26/2013 6:59:13 AM PST by SeekAndFind
NEW YORK (Reuters) - U.S. home prices picked up in December, closing out 2012 with the biggest yearly gain in more than six years as the housing market got back on its feet, a closely watched survey showed on Tuesday.
The S&P/Case Shiller composite index of 20 metropolitan areas rose 0.9 percent in December on a seasonally adjusted basis, topping expectations for a gain of 0.5 percent.
Prices in the 20 cities jumped 6.8 percent year-over-year, ahead of expectations for 6.6 percent and the best yearly gain since July 2006.
"I expect the home price rise to persist in 2013," said Michelle Meyer, senior economist at Bank Of America Merrill Lynch in New York.
For the final quarter of the year, prices gained 2 percent on a seasonally adjusted basis. On a non-adjusted basis, prices were up 0.2 percent in December.
Last year housing contributed to economic growth for the first time since 2005 as the sector began to recover from its far-reaching collapse. Still, the market is far from fully healed, with over 20 percent of mortgages underwater and foreclosure rates still elevated.
Prices have been rising since last February as the supply of available homes for sale tightened in 2012, helping to stabilize home values. Investors buying cheap homes to be converted into rentals also supported the market and some hard-hit areas saw a sharp bounce back in prices.
Phoenix, for example, saw gains of 23 percent compared to December 2011.
(Excerpt) Read more at finance.yahoo.com ...
I call BS...
Who can buy them? Who can afford the taxes? Who can sell it when they lose their job?
Tracks with what I see in my area. I’m sure some will find a way to see this as bad news in some way!
Yeah. Along with gas prices, food prices, clothing prices. It’s called inflation. Homes aren’t worth any more than they were last year, it just takes more worthless dollars to buy them.
Zero Hedge breaks it down...
Even a casual glance at the below the headline data showed that the increase in December house prices were driven mostly by Las Vegas (+1.8) and Los Angeles (+1.14%). Where have we seen this before. Declines were reported in Denver, Washington, Chicago, Detroit, Minneapolis, Charlotte, New York, Cleveland, Portland, Dallas, Seattle. Excluding those, the Case Shiller was up much more.
The inflation is now well established in the construction economy, next will be wages.
The inflation will come to wages in 2013 and then will permeate everything.
OK, so when prices were increasing rapidly, everyone was complaining about people being priced out of the housing market. Then prices dropped precipitously, and people complained that homeowners were under water on their loans and there were a lot of foreclosures.
Now prices are going up again, and that’s a good thing? Well, it is for sellers, but not for buyers.
I have an idea! Let the market work, get government out of housing and lending, and see if that doesn’t work a whole lot better than the crap that has been going on for the past few decades.
I work in land development. A few observations:
1. Inventory of brand new houses is low. The few builders left are doing ok, since there are still buyers looking for brand new, and there is very limited supply.
2. Rentals are full...at least anything decent. Builders are salivating to build small footprints and duplexes, where the mortgage payment is on par with rent.
3. Credit is getting loser (not necessarily a good thing overall), due to federal policies that de facto underwrite most home loans now.
4. Material costs are up. Lumber 15% over last year, sheetrock 30%, shingles 10%. It is hard to build new, without it costing more than existing houses...margins are very tight. And the cost of utilities has gone up 40% for gas and power.
5. Land development is very difficult. Banks are very reluctant to lend on development property...or even put up surety for a project anymore. They’ve been burned too bad.
6. The cities and counties are about to get burned. Banks with a large inventory of foreclosed lots (with no houses on them) do not see a light at the end of the tunnel...and the special assessment taxes are too high to keep holding the property. Once they start going delinquent, cities and counties will be very reluctant to do special benefit districts for development.
The last two developments I’ve done are 15 lots and 16 lots....very small. Every detail that used to be routine, concerning the financing, was suddenly an act of congress. I lost money as an engineer and designer. My client broke even as a developer/builder.
I predict the housing market will be sporadic for the next 2 years. We will occassionally see a story that the slump is over...and then sales will be flat for a few months, etc. I definitely don’t think we’re out of the woods yet.
The same bubble is re-inflating with bad loans forced onto lenders.
RE: I predict the housing market will be sporadic for the next 2 years. We will occassionally see a story that the slump is over...and then sales will be flat for a few months, etc. I definitely don’t think we’re out of the woods yet.
Which part of this great country do you live and work in?
Inventories of decent foreclosed homes in this Rocky Mtn metro area have gone, and now the other homes for sale are disappearing.
Two major employers have just opened up in the valley, and existing home inventories are dropping.
Dirt is being excavated in various places for new developments.
Some people just don’t like the idea of a market. I recall some clymer here several years ago calling people ‘negative nay boobs’ or something similar for doubting that house prices were not always on an upward trajectory.
Is the price of a house rising, or is the “average price” of homes sold rising? If its the average price of homes sold, it could just mean that there is an increase in the number of “expensive” homes sold. That would mean that the rich liberals are buying homes in California and Washington DC, and the average family can’t afford to buy a new home...and don’t.
In Maryland we have a state government that has done everything to kill new residential construction in rural and suburbs and force people back into the cities.
We adopted a new energy code that is adding $10 to $20,000 a house.
We have a “best available technology septic system” law that adds $15,000 to $50,000 a house.
We have land development restrictions that are driving up the cost of finished lots.
We have a land use zoning law change that the state pushed through that limits development of farms and is already pushing farms into foreclosure due to lower land valuations.
So when you hear about housing prices going up, don’t think that it’s because a builder or developer is making extra profits - a lot of it is because of extra costs from state regulations.
It depends on the neighborhood. I live in a declining neighborhood. The house up the street has been for sale for almost a year. Despite numerous improvements and price reductions, no one is buying. It’s a nice house. In a really good neighborhood, it might sell for $200,000 or more. The seller is now down to $75,000 and still no takers. No one wants to live in a cesspool like this.
Hedge Funds are Buying houses.
It sounds like Maryland is implementing a land planner’s dream.
Land Planners want to stop ‘white flight’ and keep people imprisoned in the urban hell-holes. I went to one of their conferences once...wow.
They wanted to tax riding lawn mowers to discourage large lots, they wanted to pay people an annual fee to stay in the city, they wanted to impose platting requirements on large single family tracts....any way they could think of to trap people in the city.
It gets really scary when they want to regulate farmers though...they are quite literally going to get us all killed (starved). If that sounds like hyperbole to anyone, take a look at North Korea or 1950’s China...commies are good at ruining agriculture.
I call and raise you, total Bullsh*t !
” Detroit posted their biggest year-over-year increases of 9.9% and 13.6% “
Sales up, in Detroit !? 13% INCREASES on homes you can get for one thousand bucks !
Sales are up in Las Vegas but it is not individual buyers, it is institutional. Large companies have bought up the best foreclosures and then re-listed the same property for close to double the original price paid.
Las Vegas real estate right now is pure speculation by private equity .
This is just more ‘ All is well, do not run , do not panic ‘ bullsh*t.
I don’t know. I doubt hedge funds would invest in this neighborhood.
Exactly...
And could one guess those private equity interests speak English with Chinese accents?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.