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L.A.-O.C. home prices up 2nd straight month

July 26, 2011

L.A.-O.C. home prices up 2nd straight month

Home pricing in Los Angeles and Orange counties rose for the second straight month in May, based on the Standard & Poor’s/Case-Shiller indexes.
This is the first back-to-back uptick in month-to-month results since July 2010. These indexes — while slow in their reporting speed, are widely watched by the industry, Wall Street and policy makers. DataQuick, for example, has already reported June — a rise of 4% from May in Orange County’s median selling price.

By S&P’s math, though, local prices were falling, however, on a year-over-year basis — down 3.2% from May 2010.
That is the sixth consecutive drop on an annual basis. One should note that a year ago, shoppers rushed to complete deal to meet tax-break deadlines worth up to $18,000 for certain California buyers.
S&P’s David Blitzer thinks the recent price strength — gains were seen in may in 16 of the 20 cities tracked — may be seasonal. He says: “This is a seasonal period of stronger demand for houses, so monthly price increases are to be expected.”
Curiously, two months ago — before the recent price upturn — Blitzer called previous price dips confirmation that prices were in a “double dip” and headed lower. Did he not recall housing long history of spring homebuying?
Blitzer also notes that 19 of these 20 cities saw prices drop over the last 12 months. “The concern is that much of the monthly gains are only seasonal,” S&P concludes.
Last year’s tax breaks had no impact?
S&P offered a recap of recent hosuing news:
Single-family housing starts up moderately in June, about same pace as a year ago.
Existing-home sales flat in June, reportedly due to contract cancellations and tight credit.
S&P/Experian Consumer Credit Default indices show continuing decline in mortgage default rates since last winter.
Tightened lending standards makes it harder to qualify for a mortgage despite very low interest rates.
S&P writes: “Combined, these data all support a continuation of the ‘bounce-along-the-bottom’ scenario we have witnessed in the housing market over the past two years.”

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