Archive for January, 2010
Annual home price declines were in the single digits in November 2009, as the Standard & Poor’s (S&P)/Case-Shiller home price indices continue a 10-month run of improved results.
The monthly indices track existing home prices every month on a year-over-year basis in 20 markets, broken down in 10-city and 20-city composites. The 10-city composite declined 4.5% and the 20-city composite declined 5.3% in November 2009 compared to November 2008.
As seen in the chart above, the November declines in the 20 metro areas and both composites were lower than their respective annual declines in October. But only five markets experienced price increases from October to November.
“While we continue to see broad improvement in home prices as measured by the annual rate, the latest data show a far more mixed picture when you look at other details,” said S&P’s index committee chairman David Blitzer.
Four markets — Charlotte, Las Vegas, Seattle and Tampa — posted the lowest index levels in four years. In other words, Blitzer said, any gains those markets experienced in recent months are erased and November is now considered the current trough value.
Other markets show continued price growth throughout 2009. Los Angeles, Phoenix, San Diego and San Francisco have seen prices increase for at least six consecutive months and Dallas, Denver, San Diego and San Francisco are back in positive annual price change territory, “something we really haven’t seen in at least two years in most markets,” Blitzer said.
“While these data do show that home prices are far more stable than they were a year ago, there is no clear sign of a sustained, broad-based recovery,” he added.
A second house price index released Tuesday by the Federal Housing Finance Agency (FHFA) showed national prices increased 0.7% on a seasonally adjusted basis from October to November. The increase comes after October’s previously reported 0.6% increase was revised to 0.4%. For the 12 months ending in November, U.S. house prices rose 0.5%. The U.S. index is 10.3% below its April 2007 peak.
The Pacific Census division led all monthly price gains, posting a 2.3% increase, followed by the South Atlantic (2%), Mountain (0.7%), West South Central (0.3%) and East North Central (0.1%). The West North Central division was flat from October, followed by monthly losses in the Middle Atlantic (0.1%), New England (0.3%) and East South Central (0.4%) divisions.
Write to Austin Kilgore.
Pimco's Bill Gross updates his investment outlook for 2010, mixed with state-of-the-market summary:
"There have been numerous changeups and curveballs in the financial markets over the past 15 months or so. Liquidation, reliquification, and the substituting of the government wallet for the invisible hand of the private sector describe the events from 30,000 feet…."
As well as the state of global economies against a backdrop of public debt he calls the ring of fire, writing that "once a country’s public debt exceeds 90% of GDP, its economic growth rate slows by 1%.":
Reports out of Washington have Dodd doing an about-face on the CFPA, with a new willingness to sacrifice its creation as a means of breaking the bipartisan bickering that repeatedly tripped up the efforts to pass anything that even vaguely resembled serious financial services reform. Should Dodd follow through and agree to scrap CFPA, it will be an astonishing turn of events.
Even if the proposed agency stays in the legislation, the fact that Dodd would even consider dropping CFPA is a huge victory for the financial services industry, which lobbied furiously against its creation. For an industry that appeared to have little lobbying muscle at this time last year, it more than proved itself capable of standing up for what it believed in. Likewise, it is a victory for Federal Reserve Chairman Ben Bernanke and the heads of the various regulatory agencies that opposed the concept of a CFPA – albeit for turf war concerns rather than perceived inadequacies in the proposal.
So the fight is on to see whether consumers will get an agency that looks out only for them. Elizabeth Warren, the Harvard professor who originally came up with the idea of a consumer financial agency, sent a letter on Jan. 20 telling supporters that “the next few weeks will determine whether families will have to play by rules written by the banks and for the banks — rules that let the industry get away with anything.”
The day before, Ralph Nader penned a note to Connecticut’s lame duck Senator Christopher Dodd, who, much to the glee of business, has reportedly been warming up to the ABA’s idea of keeping the consumer protection function under the wraps of the safety and soundness folks.
Nader told Dodd that a decision to drop the agency would “signal to consumers across the land that you, as chair of the Committee on Banking, Housing and Urban Affairs, have lost touch with Main Street interests.” There could be motivation for Dodd to wean himself away from any populist inclinations. He will be needing a job soon, and it’s probably a safe guess that he won’t be pitching for a five-figure gig with some do-good consumer group.
