US home prices rise 12.2 percent, best in 6 years

[Omaha Steve]

Source: AP-Excite

By CHRISTOPHER S. RUGABER

WASHINGTON (AP) - U.S. home prices jumped 12.2 percent in May compared with a year ago, the biggest annual gain since March 2006. The increase shows the housing recovery is strengthening.

The Standard & Poor's/Case-Shiller 20-city home price index released Tuesday also surged 2.4 percent in May from April. The month-over-month gain nearly matched the 2.6 percent increase in April from March - the highest on record.

The price increases were widespread. All 20 cities showed gains in May from April and compared with a year ago.

Prices in Dallas and Denver reached the highest level on records dating back to 2000. That marks the first time since the housing bust that any city has reached an all-time high.

Home values are rising as more people are bidding on a scarce supply of houses for sale. Steady price increases, along with stable job gains and historically low mortgage rates, have in turn encouraged more Americans to buy homes.

FULL story at link.



Read more: http://apnews.excite.com/article/20130730/DA7RTD203.html

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In this Tuesday, June 11, 2013, photo, a single house is offered for sale in Santa Monica, Calif. Sandard & Poor's/Case-Shiller reports on home prices in May on Tuesday, July 30, 2013. (AP Photo/Nick Ut)

[postulater]

1. And why is rising home prices a good thing?

It just makes it that much further away for my unemployed new grad engineer daughter with big student loans.

[NutmegYankee]

2. And therein lies the fundamental problem

How can anybody buy them?

[Omaha Steve]

3. For those that own a home...

It is usually their biggest investment. Have your daughter start small and then trade up.

[jtuck004]

5. Starting small is good. For that matter looks like she could start around 1996.

'Course, we have nearly 50 million more people now, and a whole lot less jobs...so more likely she will be joining the ranks of the renters, instead of the investors and banks that are buying the majority of the houses...

because the odds of someone working full-tme at a job that could afford the payments are getting worse...



The chart above hardly needs further clarification: since the December 2007 start of the depression, full time jobs have declined by 6.9 million while part-time jobs have increased by 3.1 million. Here.

Note: Part-time jobs have only exceeded full-time jobs three times since 1968. There was a small divergence around 1975, another slightly larger about 1983, and the last time, briefly, about 1984. They have never been this far apart for this long since 1968, and part-time job creation continues to outpace full-time work.

Good luck.

[Divernan]

10. Excellent charts. Home equity is the final target of the Ravenously Greedy too-big-to-fail banks.

The One Percenters and their agents/corporate lackeys have stripped the American work force of fairly paid, full-time employment with traditional benefits (sick time, health insurance, vacation days); continue to layoff workers every year to keep increasing their profit margins, by forcing the remaining employees to work longer hours with no overtime. What's left to legally embezzle? Home equity!

Home ownership, building up of equity, and the gradual rise in the value of said homes, formed the bedrock of financial security for Americans as they reached retirement age. To the bankers/hedge fund traders It's like waving a red flag at a bull - how can WE (bankers/traders) be the ones to enjoy the equity of residential properties/single family homes? Just foreclose and purchase on the cheap, rent on the high side.

In Florida, for example, homeowners driven into bankruptcy, learned that their homes could be purchased at sheriff's sales for only $100. This compares to a state like Ohio, where homes to be sold at sheriff's sales had to be appraised by 3 different appraisers, and could be sold for no less than 60% of the average appraised value. My daughter bought her first home, in Ft. Myers, FL, at the height of the bubble - paid 20% down, on a $140,000 condo. A year later, just as the bubble burst, her Florida office was closed down & she had to move to another state to find employment. She carried the mortgage on her Florida house for a year as the market continued to plunge downwards, basically throwing money down the toilet, and finally consulted with a bankruptcy attorney and decided to go that route. (Her mortgage holder refused to write off any part of the mortgage so she could sell it.) Whatever banker/realtor snapped up this beautiful new condo for $100, turned around and sold it within a month for about $50,000. She lost her life savings (the down payment) plus paying mortgage/taxes/insurance for a year before finally admitting defeat.

Did y'all get that? A nearly new, $140,000 condo for ONE HUNDRED DOLLARS! And THAT, boys and girls is how wealth is transferred upward in the good ole U S of A!

[jtuck004]

12. My sister and her hubby moved down there on a job offer while the banks

were starting to build up their criminal enterprise back in the 2000's, and wound up losing their home when the criminals began taking their profits, and the taxpayer bonuses they were offered for doing so.

So I can empathize with your daughter.

I know it's tough for people to understand that they are owned, but it is interesting that they work so hard to avoid having such a concept.

[phleshdef]

7. Because, if you are like me and you got a mortgage for 150k home...

...and then the value sank to 135 or 140 because of the recession, then you want to see that value go up. Middle class folks like me, all over the country have this problem and we are losing money on our investment before we even get started really paying it off.

[jtuck004]

14. And yet you are still better off than perhaps 5 or 6 million families who were foreclosed on

and yanked out of their homes over the past few years. Though, of course, not as good as the banks which reported a $20 billion profit in the 2nd quarter of this year.

All that aside, if you look at the chart above, even if your home doesn't increase in value more than inflation, and you sell it in a few years, you will have gotten some fairly cheap rent, you don't have to worry about whether the landlord is going to screw with you, and you might have a tax deduction you can't use unless you have a lot more deductions that most people. But, that probably means you kept a job with which you could afford the payments, and didn't have a medical issue that ruined you. Hundreds of thousands of people between now and then won't have that same luxury because one of those two things will happen to them.

So it probably won't be a total loss, even if it doesn't go up, eh?

Amazing to live in the world today and see what we have to look forward to, as opposed to what it looked like on the other side of 1970. Well, except for that whole nuclear annihilation thing, of course.

[phleshdef]

16. Me being better off doesn't mean its a bad thing that me (and a shit load of other people) get our..

...value back up above water. You are talking about millions of people losing money on one of the soundest, most necessary investments you can make. That's not good for the economy.

And if something happened that I could no longer work because of an accident or medical emergency, that would be even more important because I'd need all the financial security I can get. If something like that happened, I might have to sell my house. It would be pretty awful if I had to sell my house and STILL owe more left over on the mortgage because of not getting the full value of the mortgage back on top of having some crippling medical issue.

[jtuck004]

18. I didn't say it's a bad thing. I said even if you don't, it doesn't mean you are

the big loser, at least not in comparison to tens of millions of other people.

You are correct, I am talking about millions of people losing money as you said above, and that is EXACTLY what has happened over the past 30 years or so, and has accelerated over the past 10. it hasn't BEEN good for the economy. That scenario you described has happened to millions of families already, people who have no hope of recovery whatsoever, while the stock market has boomed for a increasingly smaller number of people.

I hope your home value goes up and stays, and the job continues, etc. But even if it doesn't, and the worst that happens is you don't make a profit on your home investment, you might still be better off than tens of millions of people will ever be, people who thought they would be ok, followed the rules, had homes and jobs, worked hard, and now will have to depend on working the rest of their lives and hope that that Social Security will kick in and keep them from utter poverty.

I would like very much not to see that happen to any more.

[roamer65]

4. With the level of quantitative easing the Fed is pursuing...

...EVERYTHING is going up.

$85 billion a month. Over 1 trillion dollars a year.

[Divernan]

6. Lenders & hedge funds buying foreclosed properties; turning US into nation of renters

The spin in the OP's link ignores the facts of what is driving the increase in prices/sales. Basically, the 1 percent have pretty much stripped the rest of us of our retirement savings/pensions/etc., and left us with savings accounts paying less than 1 percent interest. What is left for the robber barons to take from us? The equity we have built up in our houses. As the OP pointed out, "For those that own a home...It is usually their biggest investment. " So that's what they're going to strip us of now. Buh-bye, American dream of owning one's own home. Big Finance's plan is to turn us into a nation of renters, not home-owners.

Credit to xchrom for a thread earlier this week:http://www.democraticunderground.com/10023007641

Bloomberg news reported that Foreclosures Jump as Banks Bet on Rising U.S. Home Prices.
http://www.bloomberg.com/news/2013-06-13/foreclosures-jump-as-banks-bet-on-rising-u-s-home-prices.html

Home repossessions in the U.S. jumped 11 percent in May after declining for the previous five months as rising prices and limited inventory for sale across the country spurred banks to complete foreclosures.

Lenders took back 38,946 homes, up from 34,997 in April, according to Irvine, California-based data firm RealtyTrac, which tracks notices of default, auction and seizures. Thirty-three states had increases in the number of homes repossessed, RealtyTrac said in a report today.

Banks are more willing to move to the final stage of foreclosure because there is sufficient demand and prices are improving, said Eric Workman of Tinley Park, Illinois-based Mack Cos., which aggregates single-family rental homes and resells them to individuals and institutional investors. U.S. home prices advanced almost 11 percent in the year through March, the biggest 12-month gain since April 2006, according to the S&P/Case-Shiller index of values in 20 cities.

“For a very long period of time, the market in general and specifically banks were unsure of what these assets were valued at,” Workman, vice president of sales and marketing at Mack, said in a telephone interview. “With increasing stability of the economy and housing prices throughout the U.S., these banks and sellers are getting much more comfortable with the value of their properties.”

and credit to DUer KurtNYC for the hedge fund links.

"Hedge funds buying up foreclosure in bulk"

http://www.upi.com/Business_News/Real-Estate/2013/03/19/Hedge-funds-are-fueling-foreclosure-inflation/7031363727121/

They are buying heavily in areas that had the worst bubbles in 2007/08 -- Las Vegas, etc. (why ?)

Also using tax liens to get properties:
http://finance.fortune.cnn.com/2013/05/01/tax-liens-hedge-funds/

We are transitioning to a society where most people own nothing -- not the music on your iPod, not the software on your computer, not the records of your phones calls, not a house or home. Nothing. Ownership is being replaced by EULAs.

[Mojorabbit]

9. +100 nt

[Sunlei]

21. yes, the #1 investment of many of the 1% is real estate. welcome your new Landlords

[madville]

8. It's depressing

I have 25k in the bank for a down payment, pre-approved for 120k loan and there is nothing but junk available, what is in that range here the houses and/or the neighborhoods are crap. I guess I'll just keep renting with roommates

[Divernan]

11. Probably the wisest thing is to hang on to that 25k

Especially if there is ANY chance you might have to relocate for employment - and as the corporate layoff policies show little sign of abating, sadly, that is a very real possibility. The received wisdom, decades ago, when my ex worked for aerospace and we got transferred/changed employers every couple of years, was that you needed to live somewhere for at least 3 years for the property values to increase enough to cover the realtors' fees so you could break even if you had to sell. Talking about 7 percent.

The other thing that is horrifying is how little interest/return you can safely expect with "only" $25,000. The Big Players get far fatter returns on their investments, which they restrict to their elite circles.

Good luck to you. I am glad for you that you are employed and have a nest egg. That puts you way ahead of the game for many Americans!

[Sunlei]

22. sometimes you can find something in your price range.

I suggest county tax sales. You could get the land first, get unincorporated land if possible. Close to town or on a road with utilities to connect to. not floodland.

Can pick-up 3 or 4 acres in many good places for less than 5k, with v. low property taxes. Could build or bring-in a mod. home. Or even keep the land and resell it later for a heck of a lot better investment than money sitting in a bank.

[Rosa Luxemburg]

13. From what I heard around here is that many investors are buying up cheap properties?

but it is good news that the property market is getting hot again.

[Divernan]

15. I'm not happy about a market turning single family homes into rental properties.

There are 2 rental houses across the street from me in my middle class development - both owned by the same Chinese couple, who bought one of the houses when they first came to this country, and then moved into a McMansion (they are both University professors). They immediately turned their old house into a rental property and that was so profitable, they bought the one next door to it when an old owner died.

The turnover is frequent - every 2 years on the average, and the renters don't have an interest in making friends or maintaining the properties - they're already looking ahead to moving again. The landlords are incredibly cheap in terms of repairing the properties, let alone landscaping them or improving them in any way. Basically, those two houses are a drag on the appearance of the block, as well as the property values. Some of the renters seem nice enough; others are prone to loud music and big parties. One of the guests thought it was very amusing to pound on my front door (after midnight) and then urinate in front of my living room picture window. Another time, in the midst of a drunken party, they decided to cut down a beautiful old dogwood tree so they'd have more room to play badminton. Plus other neighbors have had two incidences of burglary by a boyfriend of one renter. Another renter actually chose to park his car in the middle of the lawn, rather than on the driveway or along the curb. A great thing about home ownership is having pride of ownership, being part of a small community and taking careful care of one's main investment.

Pardon the rant - I've been dealing with this for over 20 years! I shudder to think that more of the houses on my street may be turned into rental properties. And I don't mean to insult everyone who rents. I did, myself, for about 4 years following a divorce, and I know many good people who have lost their homes and now rent - it's just a damn shame that owning your own home is fast moving out of the realm of possibility for so many Americans!

[AngryOldDem]

23. That is the quickest way to drive down housing costs.

I run through my neighborhood (averaging 4-plus miles, so I cover some territory) and I am amazed at how many rental properties have sprung up around here over the last year or so. Some, I think, were once foreclosed properties. There are two on my cul-de-sac alone; we did not know that one house was a rental until a sign popped up last week. And this is next to a house that sold for more than $200,000 within six days. While the homeowners around here were thrilled with that price, they were less than thrilled to see the For Rent sign go up next door the next day.

I totally agree with your observations. For the most part renters have no stake in the neighborhood, or in what they're renting, and it too often shows. I've seen more rental properties trashed than I have seen kept up. The house on the corner is a huge, gorgeous Georgian that was once in pretty good shape. But the yard is now starting to go, and a creeping shabbiness is there...a nice welcome to the neighborhood for anyone who drives by.

This country...there are just no words anymore.

[Divernan]

25. "Creeping shabbiness" describes not only rental houses, but the US as a whole

That is an excellent term, and I see creeping shabbiness not only in those rental houses, but in the decaying of our national infrastructure - crumbling bridges, overgrown highway shoulders, roadways filled with cracks and potholes, empty storefronts, abandoned houses, understaffed hospitals and schools, etc. A main road which I use daily was just completely resurfaced, instead of patched, for the first time in more than 20 years at least. It's like driving on silk! And I recalled living in southern California and the Baltimore area in the 60's and all the roads were like that. But by god, it's more important to throw away billions on bailing out Big Banks, and massive monitoring of all of our citizens, subsidizing corporate welfare, and providing the military industrial complex with an international marketplace for killing and profiteering.

You are right - much as I may rant, there are just no words anymore to adequately convey the condition of this country.

[abelenkpe]

27. We rent

Have spent a lot of time and money keeping up our place since our landlord is incredibly....uh....frugal. We've been in the same place for 13 years. Moved here while grad students. Now we have two kids. We know our neighbors and local businesses. They've been here a similar amount of time. Some longer! I've watched as same size homes in our neighborhood have gone from around 280,000 in 1999 to 1.3 million today. Rents have skyrocketed, too. Home ownership is out of reach for many. Insecure jobs, stagnating wages, fewer benefits, student loan debt, these things make home ownership difficult for younger generations.

[Fire Walk With Me]

17. These numbers do not reflect that Wall Street is behind them through mass purchase of foreclosures.

It’s Not a Housing Boom. It’s a Land Grab
http://www.democraticunderground.com/10023364208

It is completely phony. Also, one of the leaked Citigroup Plutonomy memos states that the main asset of the lower 80% of US income are their homes. Nation of renters, indeed.

[abelenkpe]

26. Please read this ^

Investors are responsible for the uptick in home prices.

[Divernan]

19. How about 2 more rec's to keep this thread alive & get it on main page?

I know Obama fans won't rec it, because they want to tout "improvement" in the housing market as an accomplishment under his administration.

But I think it is BIG, BIG, news that the banks & hedge funds are now targeting single family homes as they circle and move in for the final kill of the American Dream.

[JoePhilly]

20. Everything is always bad news.

Housing pirces down ... bad news. Up, still bad news.

UE goes up, bad news. UE goes down, still bad news.

DOW goes down, bad news. DOW goes up, still bad news.

We're domed.

[MindPilot]

28. Since the middle of last year mine has gone up about $10,000 per month

I owe $396,000 and it's worth $667,000 as of this morning.

Zestimate $666,872 +$17,030 (30-day change)
Rent Zestimate $2,391/mo +$2

Zillow predicts North Park home values will increase 12.7% next year, compared to a 9.6% rise for San Diego as a whole. Among North Park homes, this home is valued 46.1% more than the midpoint (median) home, but is valued 2.9% less per square foot.

[Kingofalldems]

29. Obama is a communist and a Muslin