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U.s. Home Prices Rose More Than Forecast In June

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http://www.bloomberg.com/news/2010-08-31/home-prices-in-20-u-s-cities-rise-more-than-forecast-case-shiller-says.html

Home prices in 20 U.S. cities rose more than forecast in June from a year earlier, reflecting the influence of a government tax incentive and a sign the market was stabilizing before sales plunged in July.

The S&P/Case-Shiller index of property values increased 4.2 percent from June 2009, the group said today in New York. The median estimate of economists surveyed by Bloomberg News called for a 3.5 percent advance.

The Case-Shiller index is a moving three-month average, which means the June data are still being influenced by transactions in April and May that benefitted from the government incentive. A pullback in demand since the credit ended, mounting foreclosures and an unemployment rate near a 26- year high may weigh on prices in coming months.

“The numbers were inflated by the homebuyer tax credit,” said David Sloan, a senior economist at 4Cast Inc. in New York, who accurately forecast the gain. “The numbers will be going down in the coming months. We could see some significant declines.”

Stock-index futures trimmed earlier losses after the report and Treasury securities held gains. The contract on the Standard & Poor’s 500 Index fell 0.1 percent to 1,044.3 at 9:15 a.m. in New York. The yield on the benchmark 10-year Treasury note fell to 2.50 percent from 2.53 percent late yesterday.

Exceeds Forecasts

Economists forecast the index would rise after a 4.6 percent year-over-year increase in May, according to the median of 21 forecasts in a Bloomberg survey. Estimates ranged from 2.5 percent to 4.2 percent. Year-over-year records began in 2001.

The gauge rose 0.3 percent in June from the prior month after adjusting for seasonal variations. Unadjusted prices climbed 1 percent from the prior month.

The year-over-year measure provides better indications of trends in prices, the group has said. The panel includes Karl Case and Robert Shiller, the economists who created the index.

Nationally, prices increased 3.6 percent in the second quarter from the same time last year and were up 2.3 percent from the previous three months.

Got to love the markets, the figures for June are lovely, however it would appear there could be a slight problem with July's but hey they are a month away from being published so lets write house prices in the US are stabilising.....

So the stimulus measures are all coming to an end, when they end we'll get the real picture of the US housing market.

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http://market-ticker.org/akcs-www?post=165661

No, really?

The S&P/Case-Shiller index of property values increased 4.2 percent from June 2009, the group said today in New York. The median estimate of economists surveyed by Bloomberg News called for a 3.5 percent advance.

So let's see, if we take $8,000 and divide by 4.2% we get $190,476... heh, that's suspiciously close to the median home price. How'd that happen?

Of course when the government hands out "free checks" you'll find the market dislocates. But this destroys forward demand, as we have now seen with July's home sales numbers, as the "cheese" is the only thing that is creating sales, and organic buyers (and the setting of market prices that they cause to occur) all disappear - why would they overpay by $8,000?

There's a lesson in here for the government, in that these sorts of "pull forward demand" games are only of "benefit" for as long as they continue, and as soon as that program ends (and all such programs must end, since the "freebie money" isn't infinite either) you create a worse dislocation than you originally had, as the entirety of the distortion you created now has come back out of the market along with whatever the natural progress originally was!

With the April 30 deadline for signing a contract now past, it will be up to advances in the labor market to support home sales. Private U.S. companies added 71,000 jobs in July, fewer than economists had forecast, and initial jobless claims have averaged about 488,000 this month, a sign firings remain elevated.

Forget it. There isn't going to be any hiring-based recovery folks. Not until we get the fraud and BS out of the financial system, driving down leverage and prices on things like houses to the point that average wages can support an actual purchase without all these distortions.

And while we're at it, we need to drive manufacturing - good-paying jobs - back to the US. There are two ways to do this, broadly, both of which should happen (and neither of which will, as neither is interesting to the clowns that inhabit DC):

*

Wage-parity and environment-law-parity tariffs to make global wage arbitrage (that is, the practice of taking your labor force wherever you can legally employ slave-like conditions and poison the air, land and water) unprofitable. Labor force selection on skillset is fine. Predicating it on the ability to abuse people (or the land) is not.

*

The Fair Tax. That is, getting rid of the tens of thousands of pages of tax code that is designed to create winners and losers, forcing the cost of government into the open where it is instantly visible to the people, who ultimately pay the entire bill anyway.

Neither is going to happen with the current group in Washington DC, and since we as a nation are far more interested in someone's view on abortion rather than their position on slave-labor conditions and dumping pollutants into rivers and the air so we can have our latest electronic trinket $20 cheaper, we won't demand as voters that the debate change either.

All I can say is "get ready", because the ability of the government to continue this charade is reaching its exhaustion point.

Dennigers take on it.

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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