Tuesday, October 27, 2009

Case Shiller Shows Continued Improvement

From Bloomberg:

Home prices in 20 U.S. cities rose in August for a third consecutive month, bolstering the case that an economic recovery is at hand.

The S&P/Case-Shiller home-price index climbed 1 percent from the prior month on a seasonally adjusted basis after a 1.2 percent increase in July, the group said today in New York. From a year earlier, the gauge was down 11.3 percent, less than forecast.

Rising home sales, due in part to government programs including the first-time buyer credit and efforts to lower borrowing costs, have helped stem the slump in property values that precipitated the worst recession since the 1930s. Sustained gains in household spending, the biggest part of the economy, may be harder to come by as joblessness mounts.

Here are the charts from the report:

Click for a larger image.

While prices are still negative year over year, the rate of decline is improving. In addition

Only three cities printed a negative month over month growth in the latest survey. This is another positive development for housing prices.

The blog Calculated Rish has put forward the idea that housing will see two bottoms: one in the pace of sales and one in prices. I still think that's a correct assessment.