Optimism in the housing market
JEREMY HOBSON: Now let’s get to the housing market. Home prices are up for the first time in eight months according to the S&P/Case-Shiller index. Prices are rising in 13 of 20 cities, including Washington, D.C., San Francisco and Atlanta. On the flip side though, six metro areas are still falling and have fallen to their lowest levels in years. Those are Chicago, Charlotte, Detroit, Las Vegas, Miami and Tampa.
For more, let’s turn to our regular Tuesday analyst, Juli Niemann from Smith Moore and Company. She’s with us live from St. Louis. Good morning.
JULI NIEMANN: Good morning Jeremy.
HOBSON: Well Juli, what do you make of these numbers?
NIEMANN: Well, it’s actually very good news simply because we’re grasping a straws here. You know, a slight increase the first time in eight months. And it’s slightly better than expected. But note of my repeat use of the word “slight” here. So we’re really struggling to get any kind of good news. But bottom line is this is all done without that $8,000 tax credit. So this is actual, real purchasing going on here, not kicking the can down the road.
HOBSON: And what’s leading to that Juli? What are people doing that all of a sudden is creating a thirst for new homes?
NIEMANN: Well, a couple of things. First of all, there are new jobs opportunities out there and they’re typically in another city. People couldn’t move there before because they couldn’t get rid of their old house, so it’s showing that there are some opportunities over there. Also, you’re seeing people moving up to bigger houses and this has always been the semi-American dream is you start with your starter house and then move up to something bigger. So we’re seeing a little bit of moment there. And bottom line: school is out, so now you can move as well. So it’s seasonal.
HOBSON: Well, it’s interesting that you bring that up because you know, we’ve had so many fits and starts in the housing market. I want to ask, is there anything about the fact that this is the spring selling season, maybe these numbers are skewed in a way.
NIEMANN: Well, it does distort it a little bit simply because of school being out here. And we did have this kind of rally in housing last year and then the whole thing fizzled. But this time it’s looking a little bit more positive simply because some of the head winds in the economy are actually getting a little easier. Energy, severe storms, food — these things are easing up somewhat so maybe we’re looking at a bottoming out in the process now. Not so negative news.
HOBSON: Some slight optimism from Juli Niemann, analyst at Smith Moore and Company, thanks Juli.
NIEMANN: You bet.
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