Real Estate

Deutsche Bank anticipates slight rise from Case-Shiller

The Standard & Poor’s Case-Shiller home price index is expected to report a gain in home prices for the seventh consecutive month in a row Tuesday, Deutsche Bank (DB) said Monday. S&P emailed a note saying the index would be released as scheduled, despite Hurricane Sandy putting a damper in other financial areas.

Analysts with Deutsche forecast a 0.4% jump in August home prices when the S&P Case-Shiller publishes its Home Price Index Tuesday morning.

A jump in prices for the period would be in line with recent data from the Federal Housing Finance Agency that showed home prices up for the seventh month in a row, the Deutsche note suggested.

“We have been arguing for some time that home prices have bottomed and that they have finally entered a durable recovery phase,” Deutsche Bank wrote in its research report. “Last week, we learned that FHFA home prices rose for the seventh month in a row. Over the last year, this series is up 4.8%, the fastest pace since August 2006 (+4.9%).”

Deutsche Bank analysts believe recent data from the University of Michigan showing stronger consumer confidence underscores a minor recovery that’s already taking place in real estate.

“Higher home prices are also lifting consumer sentiment, as shown in the University of Michigan data, and we expect to see the same development with the Conference Board consumer confidence data,” Deutsche Bank noted.

James Frischling, co-founder and president of NewOak Capital, also noted this week that consumer sentiment is at a five-year high with more Americans upbeat about the economy and their own personal finances. But, he added, gross domestic product is lackluster and companies are now bracing for a tough patch in early 2013—two factors that are not helping the recovery or overall confidence in real estate or the economy.

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