Economy Watch: Home Prices Up Compared With Last Year
- Jan 30, 2013
The S&P/Case-Shiller Home Prices Indices, which were released on Tuesday, showed that residential prices were up 4.5 percent in the nation’s 10 largest metro areas, and 5.5 percent in the 20 largest metros, for the 12 months ending in November 2012. For the three months ending in November, the 10-city composite was off a slight 0.17 percent, while the 20-city composite barely moved, ending down 0.09 percent over the same period.
Despite the slight downward movements, the November monthly figures were stronger than October’s, with 10 cities seeing rising prices versus seven the month before, according to David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. Phoenix and San Francisco were both up 1.4 percent in November, while Minneapolis gained 1 percent. On the down side, Chicago was again among the weakest markets, seeing a drop of 1.3 percent for November.
Among the 20 metro areas that Case-Shiller tracks, the damage done to residential values by the housing collapse varies tremendously. The most notorious drop in prices since the last peak is, naturally, Las Vegas, which is now down 57.6 percent off peak. Miami, Phoenix and Tampa were almost as hard hit, each down more than 45 percent off peak. Metro Dallas, by contrast, has dropped only 3.8 percent off peak, and Denver lost only 3.9 percent.
Consumers feeling poorly
The Conference Board reported on Tuesday that consumers a feeling a bit gloomy, with the organization’s consumer confidence index dropping more than expected. The index came in at 58.6 at the end of January, its lowest level since November 2011, and down from 66.7 in December.
Americans’ appraisal of current conditions deteriorated in January. Those claiming business conditions are “good” declined to 16.7 percent from 17.2 percent, while those saying business conditions are “bad” increased to 27.4 percent from 26.3 percent. Consumers’ assessment of the labor market also grew more negative. Those saying jobs are “plentiful” declined to 8.6 percent from 10.8 percent, while those claiming jobs are “hard to get” increased to 37.7 percent from 36.1 percent.
“Consumers are more pessimistic about the economic outlook and, in particular, their financial situation,” Lynn Franco, economic indicators director at the Conference Board, posited in a press statement. “The increase in the payroll tax has undoubtedly dampened consumers’ spirits and it may take a while for confidence to rebound and consumers to recover from their initial paycheck shock.”
Investor feeling better
On the other hand, investors are feeling peppier, according to State Street Corp. on Tuesday. The company’s index, which measures investor confidence (or risk appetite, to put it another way), came in at 86.8 at the end of January, up 5.4 points since December. North American investors were the most confident, followed by Asian investors; European investors are still pretty skittish about risk.
Wall Street had a reasonably good day on Tuesday, with the Dow Jones Industrial Average gaining 72.49 points, or 0.52 percent. The S&P 500 was up 0.51 percent, but the Nasdaq practically broke even, ending down 0.02 percent.