Housing Market: What the Latest Reports Reveal
Original article published at www.investmentcontrarians.com
The latest release of the S&P/Case-Shiller Home Prices Index is out, measuring data through July 2012. For the third consecutive month, all 20 cities recorded monthly gains in home prices. The 20-city average year-over-year gain was 1.2%. The numbers also show that single-family homes are in demand, which isn’t new, as I’ve discussed the strength in homebuilders such as Toll Brothers, Inc. (NYSE/TOL) before.
In fact, the reports I’ve seen show that, in many markets there’s a shortage of new homes, as the homebuilders are seeing multiple bidders and price improvements. These are all great signs that the housing market is starting to regain a solid footing. Note: this does not mean we will retake the peak in home prices anytime soon. In fact, I have argued in the past that home prices were artificially pumped up during the last decade, and it will take many years before the housing market overtakes those high levels.
What is important is that buyers feel secure that home prices won’t collapse. In fact, we’re seeing many markets experience strong gains in home prices. The Case-Shiller reports that San Francisco is up 20.4%, Detroit is up 19.7%, and Phoenix is up 17.0% from their respective lows..... Read complete article at http://www.investmentcontrarians.com/real-estate/housing-market-what-the-latest-reports-reveal/713/