‘Prices have gone flat, bouncing around at what I think is essentially a bottom. We’re really going to have to wait to see what the spring market brings,’ Karl Case, a retired professor of economics at Wellesley College, told Bloomberg.
The S&P/Case-Shiller index of home values in 20 cities fell 1.6% in November from a year earlier, the biggest 12 month decrease since December 2009, the group said.
Home prices were down in 16 of the 20 MSAs compared to a year ago, with just Los Angeles, San Diego, San Francisco and Washington, D.C., showing increases. On a month on month comparison in the 20 city composite, 19 of 20 had home price declines with only San Diego recording a scant 0.1% increase.
Eight markets, Atlanta, Charlotte in North Carolina, Detroit, Las Vegas, Miami, Portland in Oregon, Seattle and Tampa in Florida, hit their lowest points since home values peaked in 2006 and 2007, meaning that average home prices in those markets have fallen even further than the lows set in the spring of 2009.
While the Federal Housing Finance Agency, which measures sales financed with mortgages backed by Fannie Mae and Freddie Mac, said separately that prices decreased by 4.3% from November 2009. And the National Association of Realtors’ affordability index, a gauge of median income against home prices, reached an all-time high of 184.5 in November.
Case believes that an abundance of inexpensive homes and an expanding economy will support housing demand as it enters the so called spring selling season when the bulk of transactions typically occur.
‘There are bargains out there,’ said Case. Affordability will entice first time buyers to jump into the market if jobs are created, he added.
The US unemployment rate dropped to 9.4% last month after reaching a seven month high of 9.8% in November, according to the Bureau of Labour Statistics. The jobless rate has remained above 9% for 20 months and will probably average 9.3% this year, according to a Bloomberg News survey of economists.
Also helping is the fact that consumer confidence in January climbed to the highest level in eight months as Americans became more optimistic about job prospects, according to a report by the Conference Board.
The share of people who said they intended to buy a home rose to 2.2%, the New York-based private research group said. That was the second consecutive gain after November’s 1.7% which matched an all time low set at the end of 2009.
