Breaking News

Home Prices Climbing Once Again

By Ed YardeniMarket OverviewMay 29, 2013 12:17AM ET
Home Prices Climbing Once Again
By Ed Yardeni   |  May 29, 2013 12:17AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
Figure 531
Figure 531

I predict that in the next 18-24 months, there will be no negative equity in America’s real estate market. Monday, we learned that the S&P/Case Shiller composite index of 20 metropolitan areas climbed 10.9% y/y during March, the biggest increase since April 2006, just before prices peaked in the summer of that year.

The 12-month moving average of the median existing single-family home price is up 10.5% since it bottomed during February 2012. It is still 18.9% below its record high during July 2006. Interestingly, the median price of a new single-family home recently rose to a new all-time high! No wonder that housing-related stocks continue to outperform the S&P 500. Consider the following:

(1) The 5/16 WSJ reported that a group led by billionaire hedge-fund manager William Ackman is in contract to buy a penthouse apartment in Manhattan for more than $90 million. Citadel’s Ken Griffin has bought four adjoining properties in Palm Beach, Fla. for a total of nearly $130 million, adding to a $15 million buy he made in November of a penthouse apartment in Chicago that he is combining with the floor below.

(2) On Monday, the WSJ reported that “[i]n California, the number of homes sold in recent months that had been flipped--or bought and resold within six months--has reached the highest levels since late 2005, according to PropertyRadar, a real-estate data firm. About 6,000 homes have been flipped in the state this year through April, or more than 5% of all homes sold statewide….Six of the 10 largest price gains in major U.S. cities over the past year have been in California, according to Zillow. In April, home values rose by 25% from a year earlier in San Jose, San Francisco and Sacramento, and by 18% in Los Angeles.”

(3) On Tuesday, the “Greater New York” section of the WSJ reported: “House prices in the New York City suburbs, after a six-year roller coaster ride in which they lost roughly a quarter of their value, are climbing again….Buyers who have been waiting have jumped back in, creating bidding wars for many desirable properties, brokers say. The number of new contracts signed is up; some homes are selling in a few days, often with multiple offers.”

Briefing: Gilded Age. (1) Edging away from rational toward irrational exuberance. (2) From fairly valued to overvalued this summer? (3) New record highs for forward earnings. (4) As yields go up, P/Es go down according to Rule of 20. (5) The Fed’s MAMU dilemma. (6) End in sight for negative home equity. (7) Moody’s is less depressed about banks. (8) Consumers are happier. (9) Another Gilded Age already? (10) Gatsby’s bling.
Figure 530
Figure 530
Home Prices Climbing Once Again
Home Prices Climbing Once Again

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Are you sure you want to delete this chart?
Write your thoughts here
Replace the attached chart with a new chart ?
Post also to:
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Post 1000
Please wait a minute before you try to comment again.
Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Add Chart to Comment
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email