The anecdotal evidence we have heard from real estate agents across the country is being proven as real estate values across the country have gone up in the May, 2009 Case Shiller report. Numbers were up across the board and into positive or break even territory in all but 5 of the 20 cities.
This is good news. The markets have been waiting for consumer confidence in real estate to return for 3 years. Once we have the critical mass of buyers who are ready to buy and feel that their investment is safe the market will have it’s base.
And right now that is all real estate professionals are looking for. It has been a wild ride for all involved and I know I can say that a little normalcy would be appreciated.
Case Shiller Report For May 2009
Metro Area May09 Apr09-May09 May08-09 Atlanta 105.69 0.3% -15.0% Boston 148.77 1.6% -7.2% Charlotte 119.80 0.9% -10.0% Chicago 123.68 1.1% -17.5% Cleveland 102.11 4.1% -6.2% Dallas 116.54 1.9% -4.1% Denver 123.78 1.3% -4.6% Detroit 70.05 0.2% -24.5% Las Vegas 109.49 -2.6% -32.0% Los Angeles 159.18 -0.1% -19.8% Miami 144.59 -0.8% -25.2% Minneapolis 109.77 1.2% -21.7% New York 170.51 0.0% -12.2% Phoenix 103.56 -0.9% -34.2% Portland 146.97 0.1% -16.3% San Diego 145.06 0.4% -18.5% San Francisco 120.16 1.4% -26.1% Seattle 148.96 -0.3% -16.6% Tampa 140.35 0.0% -20.8% Washington 169.49 1.3% -14.9%
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{ 5 comments… read them below or add one }
Great news or just a seasonal factor coming to play? Residential sales activity is returning to the levels of the seasonal sales market. No one should be surprised that new homes sales have increased with the incentives of the $8,000 new home buyer program and interest rates below 5.5%.
But hold on, seasonal sales activity should be up. The peak months for sales will be June, July and August. So for the next several months we should continue to see a recovery in activity. The key benchmark for recovery is the median sales price, which is still down. Once the excess building supply and foreclosure activity (Housing In Crisis , Mortgage Assistance Program) abates, this number should correct itself to higher levels of $220,000 to $225,000. This will not occur until the summer selling season of 2010.
So yes, great news, but the real recovery is still a year off.
This is just the beginning! This next recovery is going to be huge.
It's great that the numbers are coming up. It's been tough hearing people think we aren't going to jump back, but at least it's coming soon!
I'm happy for any good news these days.
Tom -
I hesitate to call this good news, or any evidence of returning consumer confidence. Seasonality is one issue, but the other one is that the change from April to May could be entirely tax-credit driven, and all that does is pull demand forward. See, e.g.: http://www.calculatedriskblog.com/2010/06/case-sh…
And I personally wonder about people who are willing to go hundreds of thousands of dollars into debt for the paltry sum of $8k in one year. So anyone who hasn't taken advantage of the tax credit already isn't likely to be jumping back into the market anytime soon barring further changes in the economy: jobs, mortgage rates, overall home prices, and the price-to-rent ratios.
The news for May so far is not sunny: http://www.housingwatch.com/2010/06/23/new-home-s… I'd love to see the market turn around, but I would temper the optimism for now.
The key stat, without a doubt, is employment. As long as (official) unemployment is around 10%, I don't see how anyone thinks consumer confidence is on the rebound.
-rsh