Economy Watch: Home Prices Still Moving Downward
- Mar 28, 2012
By Dees Stribling, Contributing Editor
The latest S&P/Case-Shiller 20-city composite index was down 0.8 percent, representing a declining three-month moving average for November 2011 to January 2012, according to the rating agency on Tuesday. Over the previous 12 months (inclusive of January 2012), Case-Shiller reports that home prices were down 3.8 percent for the 20 largest metro markets in the country.
Since the most recent Case-Shiller includes data as old as November, it’s possible that there’s been some turnaround in prices since the end of January, as indicated by February’s modest uptick in prices for both new and existing homes reported last week. Reversing the downward movement of home prices would take more than one month of rises, however. For the moment, “bouncing along the bottom” might be the best way to describe most metro markets.
In any case, the 20-city index is at its lowest level since December 2002, while the 10-city index last saw lows this low in May 2003. Eight MSAs—Atlanta, Chicago, Cleveland, Las Vegas, New York, Portland, Seattle and Tampa—all hit their lowest levels in many a long moon (or, as economists would say, during the current housing cycle, which are roughly two decades long, depending on which economist one asks).
Consumer confidence drops slightly
The Conference Board said on Tuesday that its Consumer Confidence Index, which has been increasing in recent months (including February), dropped a little in March. The index now stands at 70.2, down from 71.6 in February. According to the Conference Board’s reckoning, the year 1985 = 100, so even with recent increases there’s considerable distance to go to reach mid-80s bliss.
Most of the decline was from a case of the jitters—that is, a drop in the short-term outlook. Curiously enough, consumers’ assessment of current conditions increased from 46.4 to 51. The last time consumers were so optimistic about current conditions was September 2008, when they were standing on the edge of a precipice without realizing it.
Consumers were both more cheerful and more worried during February. Those claiming business conditions are “good” increased 14.3 percent from 13.7 percent, while those claiming business conditions are “bad” also increased, to 32.7 percent from 31.7 percent. Similarly, the proportion of consumers expecting business conditions to improve over the next six months increased to 19.2 percent from 18.9 percent, while those anticipating business conditions will worsen also rose, to 13.5 percent from 11.8 percent.
JOBS act passes Congress
In an election year, tinkering at the edge of the unemployment problem is apparently something the divided Congress can get behind, unlike more fundamental matters of policy. The House of Representatives gave final approval to the JOBS Act on Tuesday 380-41, thus signing off on something supported by both President Obama and the Senate, which passed the bill last week. The president plans to sign it.
The bill allows certain “emerging growth” companies to conduct IPOs without disclosing quite everything required by a standard IPO, and it also provides for “crowd-funding” for small companies. Crowd-funding is the sale of shares to individuals through the Internet or other means, and the bill allows small companies to raise $1 million worth of such funding annually without registering the shares with the SEC.
Wall Street didn’t much care for the news about housing, or for Ben Bernanke’s words of caution about employment during a rare TV interview, and lost some ground on Tuesday. The Dow Jones Industrial Average was down 43.9 points, or 0.33 percent, while the S&P 500 declined 0.28 percent and the Nasdaq lost 0.07 percent.