Equilibrium Home Price
January 11, 2012 by staff
Equilibrium Home Price, Residential real estate prices dropped more than forecast in the year ended October, showing a broad-based decline that indicates the U.S. housing market continues to be weighed down by foreclosures.
The S&P/Case-Shiller index of property values in 20 cities dropped 3.4 percent from October 2010 after decreasing 3.5 percent in the year ending September, the group said Tuesday. For San Francisco, values dropped 4.7 percent.
The median forecast of 27 economists in a Bloomberg News survey projected a 3.2 percent decrease.
The real estate market is bracing for another wave of foreclosures that may keep pressure on home prices, indicating any housing recovery will take time to develop. Nonetheless, rising builder confidence, a pickup in construction and fewer unsold new properties for sale are among signs the industry that triggered the last recession is steadying.
“It’s a picture of a market that’s trying to get back to equilibrium,” Karl Case, co-creator of the index, said Tuesday in an interview on Bloomberg Radio. “Different things are happening in different markets. It’s very segmented. You’ve got these huge inventories that we’ve never really had before.”
Estimates in the Bloomberg survey for the price change ranged from declines of 2.4 percent to 3.6 percent. The Case-Shiller index is based on a three-month average, which means the October data were influenced by transactions in August and September.
Home prices adjusted for seasonal variations fell 0.6 percent in October from the prior month after dropping 0.7 percent in September. Unadjusted prices decreased 1.2 percent from September as 19 of 20 cities showed declines. Eleven of the cities slumped by 1 percent or more. Only Phoenix posted a gain.
Atlanta and Las Vegas posted new post-peak lows in October, the report showed.
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