LA Real Estate Advice: Home Prices Post Year-to-Year Gain

Westside LA Real Estate Advice: U.S. home prices in February rose from a year earlier for the first time in more than three years, according to the S&P Case-Shiller home-price indexes, although month-to-month declines continued for the fifth straight month.

Also Tuesday, the Conference Board said consumer confidence increased strongly in April to its highest reading since September 2008.

S&P’s David Blitzer warned it was “too early to say that the housing market is recovering.” He noted prices in six metropolitan areas were at their lowest levels in February since they peaked several years ago.

Prices in 10 major metropolitan areas were up 1.4% in February from a year earlier, while the index for 20 major metropolitan areas rose 0.6%. Compared with January, the 10-area index declined 0.6% and the 20-area index fell 0.9%. Adjusted for seasonal factors, the 10-city index rose 0.1% on the month in February, while the 20-city composite slid 0.1%.

The recovery in the U.S. housing market has been fragile. And while the government last week reported March new-home sales data surged nearly 27% to a 411,000 annual rate, well above expectations, the report was likely fueled by a government tax credit aimed at driving home buying. The credit, which expires Friday, has helped portray a housing sector that may be turning a corner, although there are some concerns it is taking away from future sales.

“Existing and new home sales, inventories and housing starts all show tremendous improvement in their March statistics,” said Mr. Blitzer. He attributed the strength to the homebuyer tax credit, which could flow through some of S&P Case-Shiller’s data in the next few months.

Compared with a year earlier, Las Vegas continued to be the hardest hit, down 15%. San Diego was the only metro area to post a month-to-month increase, sans seasonal adjustment. Six markets—Charlotte, Las Vegas, New York, Portland, Seattle and Tampa—reported new price

Meanwhile, the Conference Board, a private research group, said its index of consumer confidence rose to 57.9 this month from a revised 52.3 in March, first reported as 52.5.

The April reading was much better than the 54.0 expected by economists surveyed by Dow Jones Newswires.

The present-situation index, a gauge of consumers’ assessment of current economic conditions, increased to 28.6 from a revised 25.2 in March, originally reported at 26.0.

Consumer expectations for economic activity over the next six months jumped to 77.4 in April from a revised 70.4, first reported as 70.2.

“Consumers’ concerns about current business and labor market conditions eased again,” said Lynn Franco, director of the Conference Board Consumer Research Center. “Looking ahead, continued job growth will be key in sustaining positive momentum.”

Consumers reported feeling slightly better about the current job situation. The percentage of respondents who think jobs are “hard to get” fell to 45.0% in April from 46.3% in March, while those who think jobs are “plentiful” edged to 4.8% from 4.0%.

Expectations about labor markets also improved. The percentage of consumers expecting more jobs in the months ahead edged up to 18.0% from 14.1% in March, and the proportion expecting fewer jobs fell to 20.0%, from 21.4% last month.

Buying plans increased in April, with increases in plans to purchase autos and major appliances.

Source: Wall Street Journal