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BILL RADKE: Let’s greet our Tuesday morning regular, analyst Juli Niemann at Smith, Moore & Co. joining us live form St. Louis. Good morning, Juli.
JULI NIEMANN: Good morning, Bill.
RADKE: So with unemployment still so high, why did home prices rise 3 percent over a year ago?
NIEMANN: Well summer’s always a good time. School year’s over, people are moving, and you still have a little bit of the tag end of that first-time home owner buyer credit that helped to boost both demand and prices. But when you adjust figures for all that, and the credit is gone, prices were basically flat for year over year.
RADKE: Flat. Well at least that could be a bottom, maybe?
NIEMANN: Well, supply and demand are really very regional. Southern California, where you are, looks like it’s a real recovery. The largest 10 cities saw some kind of a recovery. But everybody else is pretty much in a ditch still, especially the sand states — Florida, Nevada, Arizona. Foreclosures are rising and unemployment is likely to rise as well as discouraged workers start looking for jobs. So the bottom is it there? Not really.
RADKE: I’ve seen reports that even with interest rates so low, there’s not a lot of lending borrowing going on. What’s going on with banks these days?
NIEMANN: Well probably the big thing with banks is they don’t want to renegotiate those home loans at this point and time. They’ve got a lot of new regulations. They have some capital available, but they may have to hang onto it themselves because they’re looking at more loans still going south. A few of the big boys are putting a toe in the water in terms of lending, but that’s going to mergers and acquisitions. You still don’t see much going into real estate.
RADKE: OK. That’s Juli Niemann at Smith, Moore and Co. Good to talk to you Juli.
NIEMANN: You bet.
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