Explaining Southern California's economy

Case-Shiller: Los Angeles housing prices gain in September but pace slows

Existing Homes Sales Jump More Than Forecast

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Tract homes in Santa Clarita, California. The September Case-Shiller index shows prices in the U.S. rising 3 percent year-over-year.

The latest numbers show Los Angeles home prices increased in September.

The S&P/Case-Shiller index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The September figures are the latest available.

The September Case-Shiller index, the most highly regarded set of numbers on the U.S. housing market, shows home prices increased 3 percent over September 2011, the eighth straight month of price increases.  But for L.A. the story is a bit subdued.

The Los Angeles housing market got absolutely crushed during the financial crisis. At this stage, the city could use more robust price appreciation.

From August to September, prices in L.A. moved up 1 percent, which was slightly worse than August's 1.3 percent. The month-over-month number hasn't been higher than 2 percent on the plus side since May. 


Case-Shiller: Los Angeles sees July gains but stays in the middle of the pack

Existing Homes Sales Jump More Than Forecast

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Tract homes in Santa Clarita, California. The Case-Shiller index for July saw Los Angeles and the U.S. continue a positive trend for prices.

The July Case-Shiller index has just been released and once again, while the news for Los Angeles is positive, it isn't spectacular — and a bit of a letdown after the city's housing market picked up some momentum earlier this year. Prices improved 1.3 pecent in July, but that has to be contrasted with a 1.7-percent uptick for June, a 2.2-percent gain for May, and an 1.5 percent boost in April.

Year-over-year, L.A. was basically flat with a 0.4-percent gain. 

In terms of the Case-Shiller index, L.A. continues to hang out in the center of the 20 cities the index tracks. It's July performance nearly matches the index's 20-city composite of +1.6-percent for the period.

Nationally, every city in the Case-Shiller index saw prices move up in July — as well as in June. Some cities also saw big hikes from last August, with Phoenix taking the lead, at more then 16 percent. It seems pretty clear at this point that housing in the U.S. has established a bottom. Case-Shiller notes that prices have now recovered to 2003 levels, for the cities the index tracks.


Your U.S. economy is sending mixed signals

Retailers Report Stronger Than Expected Earnings For Janurary

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Shoppers and pedestrians in New York City. Consumer confidence declined to Nov. 2011 levels in August, according to the Conference Board.

It's starting to look like housing prices in the U.S. are forming a bottom. The latest Case-Shiller index, which lags by several months much of the other data on housing cranked out by various sources, is showing an ascending price trend across the country. Month after month, prices have moved up (although not always improving on the previous month's positive movement). 

Importantly, this is price we're talking about, not sales. Sales are important — they provide a sense of how much demand is in the market — but unless you look at sales data over a number of months, you can get distracted by noise. Rising prices, on the other hand, signal that homes are gaining value as an asset. This is what anyone who's planning to buy or hoping to get out of being underwater on a mortgage wants to hear.


April Case-Shiller Index: Price slide could be slowing in L.A.

April 2012 Case-Shiller


L.A. home prices are down from last April, but they've been trending up modestly for the first part of 2012.

The April Case-Shiller Index came out yesterday and contained good news for most of the 20 cities that the index covers and some indications of a decent trend for L.A. in the first quarter of 2012. Home prices were still down in L.A. compared with this time last year — down 3.6 percent in fact — but over the past few months, prices have been edging up.

Not as much as in Phoenix, which rose by 8.6 percent from April 2011. But the decline wasn't as severe as in Atlanta, which dropped by 17 percent.

In L.A., February-March saw a tiny 0.1-percent increase after a January-February month-on-month decline. But the March-April uptick was better: 1.5 percent. This could mean that prices are gaining a footing and could start to build on their gains. Sales, after all, have been improving in L.A. But prices haven't yet caught up. This could change as foreclosures and short sales (when the lender agrees to accept a sale for less than is owed on the mortgage) move through the system.


Housing prices: Los Angeles is on the edge


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A realtor sign advertises a bank-owned house for sale in California. The March Case-Shiller index suggests that Los Angeles may finally have hit a true bottom for prices.

The Case-Shiller index is out for March 2012. The bottom line is that price declines across the indices — which tracks housing prices data in two groups, across 10 and 20 U.S. cities — are moderating. Or seem to be moderating. This means that many cities may finally be scraping along a true bottom for housing prices, setting the stage for a recovery that can sustain itself. 

This is from the S&P/Case-Shiller press release:

“The regions showed mixed results for March.  Twelve of the cities saw average home prices rise in March over February, seven saw prices fall and one  – Las Vegas  – was flat.   The Composites were largely unchanged with the 10-City down only 0.1% and the 20-City unchanged.  After close to six consecutive months of price declines across most cities, this is relatively good news.  We just need to see it happen in more of the cities and for many months in a row.  Since we are entering a seasonal buying period, it becomes very important to look at both monthly and annual rates of change in home prices in order to understand the broader trend going forward.”