February 23rd, 2010

Case-Shiller home price index and 7 months of home price increases.  The Case-Shiller index is used to evaluate home prices for the market in general.  During the real estate collapse, we saw home prices plummet – and any time now people are hoping that they will rise.  What used to be million dollar homes sometimes sold for a couple hundred thousand dollars – if they even sold at all.

The following cities are used to calculate the index: Phoenix, Los Angeles, San Diego County, San Francisco, Denver-Aurora Metropolitan Area, Washington Metropolitan Area, South Florida Tampa Bay, Atlanta, Chicago, Boston, Detroit, Minneapolis-Saint Paul, Charlotte, Las Vegas, New York, Greater Cleveland, Portland, Dallas/Fort Worth Metroplex, and Seattle.

In December 2009, home prices rose for the seventh straight month.  Granted the increase wasn’t but only .2% from November 2009, it’s still leaps better than the sometimes double-digit declines some areas experienced in the past. Home prices were still down 3.1% from December 2008, but officials had estimated a 3.2% decline from 08 to 09.

Even though there are 7 months of home price increases, optimism should remain guarded.  The FED recently issued a prime rate increase of a quarter percent, which will eventually lead higher interest rates on home loans – even for the most qualified buyers. The increasing prime rate will make a lot of changes to our economic landscape. If you plan on purchasing a home in the near future, you may want to lock your rates in now.

Source:

WSJ Market Watch

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