Housing market is lower however home values are moving upward a bit

There doesn’t seem to be a lot of good news when it comes to real estate within the U.S. Hope, it appears, does spring eternal though. There is some good news, though. It turns out that U.S. home prices have been increasing, if only slightly, for the last few consecutive months. The cost of homes from the end of May to the end of June 2010, according to the Case Shiller Price Index, rose ever so slightly. There aren’t a lot of positive assumptions that are being made about real estate these days, so it is a welcome change to hear very good news.

Small climb in home costs

20 cities are used to average out the cost of homes by Standard and Poor’s Case Shiller price index. Home prices increased by 4.4 percent, according to the New York Times, over second quarter of 2010. Last quarter, prices had a 2.8 percent drop. The increase is also for the whole year. Second quarter 2010 home prices are up 3.6 percent compared to second quarter of 2009. Since June, the prices were still going moving upward. Granted, it was only by 1 percent.

Exactly what is the hook

There is a hitch, of course. Home prices may have risen, but sales are down. The homebuyer tax credit helped to keep sales going. Nevertheless, sales began to fall off once the credit lapsed. Sales and prices are kind of connected. Costs are expected to drop off soon as well. That said, one of the economists for whom the Case Shiller Price Index is named, Karl Case, thinks that there are a lot of positives in the new data, according to Bloomberg. Case believes that the market is going to take another year or so before it stabilizes and begins to improve.

Not really the most detrimental news ever

The homebuyer tax credit was only a finger within the dam. It provided an artificial and only momentary boost to house sales and home prices. True activity in real estate cannot resume until there isn’t really anything keeping activity moving upward or down. There is some consolation in that things are better than last year.

Additional reading

Bloomberg

bloomberg.com/news/2010-08-31/karl-case-sees-a-lot-of-positive-stuff-in-housing-price-data-tom-keene.html

NY Times

nytimes.com/2010/09/01/business/economy/01econ.html?partner=rss and emc=rss