House Prices Continue to Rebound
Corelogic is reporting another gain in real estate prices:
“SANTA ANA, Calif., July 2, 2012—CoreLogic (NYSE: CLGX), a leading provider of information, analytics and business services, today released its May Home Price Index (HPI®) report. Home prices nationwide, including distressed sales, increased on a year-over-year basis by 2.0 percent in May 2012 compared to May 2011. On a month-over-month basis, home prices, including distressed sales, also increased by 1.8 percent in May 2012 compared to April 2012*. The May 2012 figures mark the third consecutive increase in home prices nationwide on both a year-over-year and month-over-month basis.”
This is another data point that would really turn out to be bizarre if we’re in a recession – home prices have been rising in recent months. The amount of generally positive economic activity associated with housing and the impact on consumer balance sheets is sizable. And since the balance sheet recession’s primary cause was the collapsing price of real estate it would be bizarre if the positive trend in prices turned out to negatively correlate with overall economic growth.
Source: Corelogic
Cullen Roche
Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.
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5 Comments
Cullen,
If home prices were rising because of increased demand, then it would be bizarre. But it seems that home prices are rising because of a lack of supply–due to negative equity, more investors buying for rental income rather than to flip, and expectations of lower prices. Then it’s not so bizarre.
http://www.calculatedriskblog.com/2012/06/housing-inventory-and-negative-equity.html
Why is buying for rental income worse than flipping houses? When is investment worse than speculation?
The issue is lack of supply causing prices to rise. Flipping puts more houses on the market. This isn’t about speculation or investment from a broader standpoint. It is about housing inventory.
I’m wondering if there is a bifurcation in home prices occurring? Are there home which simply are not selling due to the MERS fiasco of unencumbered titles, which then sit idle on the market w/o bids? And are remaining homes that have clear title then bid up slightly higher??
i have no idea, but…… if i were a homebuyer, i sure wouldn’t want to purchase a home unless i knew i had free and clear title….
“The problem is that the Banks had voluntarily stopped their foreclosures while negotiating the robo-signing settlement. They are now poised ‘to flood the market with foreclosed homes.’ Their distressed sales are likely to pressure prices.”
http://www.ritholtz.com/blog/2012/06/looming-foreclosures-house-price-obstacle/