Real Estate Market Commentary - November 2012
by Peter L. Zachary, MAI, MRICS
November was a month of extremely good news for the housing market on a national level. On November 28, 2012 the New York Daily News published an article called, “Happy Homes: Prices up for 6th month as econ picture brightens”. It stated: “Home Prices edged higher for a sixth straight month in September, delivering more evidence the housing market is snapping back. Other reports on Tuesday showing that consumers were in the best mood in over four years and that businesses plan to keep spending also lifted hopes the U.S. recovery is holding its own. “All three of these releases were positive,” Sean Incremona, an economist at 4CAST, told the Daily News. “It shows that the economy is still showing progress, even though there are risks and reasons for concern.”
Home prices in 20 metropolitan areas added to a recent string of monthly gains, inching up 0.3% between September and August, S&P Case-Chiller’s index of property values showed. Since September 2011, they have risen 3%, the biggest one-year jump since July 2010. Prices in the New York Metro area, though, were down 2.3% in September from the same period a year ago. The healing in the national housing market may be giving Americans a bit more faith in the economy. The Conference Board’s consumer confidence index rose to 73.7, a peak last seen in
February 2008, as the share of Americans who expect to buy a home hit a record high.
That bodes well for consumer spending, a major economic engine. Meanwhile, a key gauge of business spending perked up last month, raising hopes that companies are getting back to business after a summertime investing slowdown. In October, nondefense orders excluding aircraft, a proxy for business spending plans, rose
1.7%, the Commerce Department said. All that wasn’t enough, though, to keep stock investors from hitting the sell button after
Senate Majority Leader Harry Reid said there had been “little progress” toward resolving the impending “fiscal cliff” of tax hikes and spending cuts that threaten U.S. growth.”
Another article “Housing $$ gains forget NY”, in the same November 28, 2012 issue of the Daily News talks about the drop in home prices in New York, while the rest of the nation was headed for better news. It said: “New York home prices fell 2.3 percent at the end of the third quarter compared with the year-ago quarter – while most of the country was seeing home prices rebound, a survey yesterday showed.
The weakness in the Big Apple was the result of weakness in the financial services sector, born out of Wall Street’s fears over tighter regulation, said David Blitzer, director of the S&P/Case-Shiller index, which produced the survey. The survey, which tracks the top 20 metropolitain areas, showed homes prices overall gained 3.6 percent in the quarter – their best upswing since July 2010. Chicago was the only other city seeing prices decline. “Banks and financial services drive the economies in these two cities, and their malaise over
tighter regulation in their industries is finally catching up with them,” said Blitzer.
Hurricane Sandy might also boost home prices next year, as demand for construction services and scarce materials rise, he said. This, Blitzer noted, might make the bargain-priced fixer-upper you were eying eventually cost more than you had hoped.
There is no doubt that if the market continues on this path we will continue to see a positive future for housing, however we need a little more of the nations luck in the housing market to hit New York as well.
Let’s hope it comes soon, more to come next month...
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