Real Estate Market

Housing Figures Post a New Low; Economic Figures Show Growth

(4/2/2012) In an increasingly common pattern as of late, good news on the economic front arrived with the announcement of less-than-good news on the housing front.

First, the bad news. Standard and Poor's announced Tuesday that January was the fifth consecutive month of falling home prices. This represents a new low for the troubled housing market.

Home values fell 0.8% in January from December figures. Overall, prices are down 3.8% from a year ago, and are at 2003 levels.

Statistics are based on the 20-city S&P Case-Shiller house price index.

In a statement, the S&P index committee chairman summarized the news.

“Despite some positive economic signs, home prices continue to drop,” said chairman David Blitzer.

Drilling down, eight cities in the index posted new lows in January. The only cities to experience increases in home values were Miami, Phoenix and Washington.

Looking at these statistics over a longer time period, the Case Shiller house price index has actually fallen 34% since the peak in 2006. Industry analysts expect more price declines before any increases occur.

Mediating these relatively negative news are reported improvements in general economic figures.

The Labor Department reported Thursday that new jobless claims fell by 5,000 last week. The new total of 359,000 jobless claims represents a four-year low.

In addition, the Department of Commerce reported the GDP grew at an annualized rate of 3.0% in the fourth quarter of 2012. That remained unchanged from its previous estimate.

Finally, GDI, or Gross Domestic Income, grew by 4.4% in fourth quarter of 2012. GDI measures economic indicators like the income of workers, as well as business profits. While not frequently used, its growth is encouraging, as it represents a 2.6% increase from the previous quarter.