Finance Matters

Posts Tagged ‘house price’

Markets will be paying close attention to a series of reports out of Europe and the U.S. on Wednesday, with final readings of GDP set for release in France and the U.K., as well as February’s durable goods report in the U.S. In earnings, expect announcements from Family Dollar and Mosaic Co. 

Here’s what you need to know.

• France starts things off at 1:30 a.m. EST on Sunday morning with a final reading of fourth quarter GDP. Economists expect the economy expanded by 0.2 percent in the final quarter, the same as an earlier reading.
• Swedish consumer confidence follows at 3:00 a.m. EST, with expectations for the index to improve in March to -2 from -3.2.
• Italian business confidence will be announced at 4:00 a.m. EST. Economists polled by ForexTV expect the index to improve in March to 91.7 from 91.5. 
• At 4:30 a.m. EST, the U.K. will release a final reading of fourth quarter GDP. Consensus opinion is for no change from earlier estimates of a 0.2 percent contraction. 
• A reading of Icelandic consumer prices will be released at 5:00 a.m. EST. CPI last increased by 1.0 percent in February from January. There is no consensus estimate for the March report.
• German consumer prices are expected to increase 0.3 percent in a March preliminary reading, which is set for release at 8:00 a.m. EST. 
• Attention shifts to the U.S. at 8:30 a.m. EST with February’s durable goods orders report. Economists anticipate orders grew by 3.0 percent during the month, while non defense capital goods orders excluding air increased 1.5 percent.
• At 9:00 a.m. EST, the Teranet-National Bank House Price Index will be updated to reflect changes to home prices in Canada in January. There is no consensus estimate at this time. 

Below, the major earnings announcements scheduled for the day.

Family Dollar Stores (FDO): $1.13
Mosaic (MOS): $0.69
Red Hat (RHT): $0.27

Consensus estimates provided by Bloomberg.

Please follow Money Game on Twitter and Facebook.

Join the conversation about this story »

See Also:

• Here Are The Key Market Moving Events For Tuesday, March 20, 2012
• Here Are The Key Market Moving Events For Tuesday, March 27, 2012
• Here Are The Key Market Moving Events For Wednesday, March 21, 2012

January Case-Shiller house price data comes out today.

Analysts expect a 3.8% annual drop, according to Briefing.com.

That’s a little less worse than the 4% drop for December, but it’s still weak. Note that all the housing data lately has been a bummer.

But there’s a key thing to realize about Case-Shiller numbers, and that’s that they’re very lagged.

Calculated Risk wrote about this yesterday…

But remember that the purchase agreement for a house that closed in November was probably signed in September or early October. So some portion of the Case-Shiller index will be for contract prices 6 or even 7 months ago! 

Other house price indexes do a little better. CoreLogic uses a weighted 3 month average with the most recent month weighted the most – and they will release their February index next week, almost a month ahead of Case-Shiller. The LPS house price index is for just one month (not an average) and uses only closings (not recordings like other indexes that can add an additional lag). 

But the key point is that the Case-Shiller index will not catch the inflection point for house prices until well after the event happens. Just something to remember …

Still, the Case-Shiller index is the gold standard of housing data, and the folks behind the index today (Robert Shiller and S&P’s David Blitzer) make a good case for its usefulness.

Our Sam Ro talked with both of them in January on this matter:

David Blitzer, Managing Director and Chairman of S&P’s Index Committee, told Business Insider that there is indeed a lag between the time a price is agreed on and when the sale closes.  However, he thinks a six month lag may be on the high side.  We asked Blitzer about Caron’s assessment. Here’s how he responded:

The analyst is correct about one point — prices for S&P/Case-Shiller (SPCS) are based on public filings. However, these are the only consistent, reliable and accurate source of price data. Further the time from contract to closing is more like 4 to 8 weeks, not 3 to 6 months. Also, many sales collapse before the sale closes and the only way to be sure the sales is arms length is through the public records of closings.

We also spoke to Professor Robert Shiller, co-creator of the Case-Shiller index, who shared Blitzer’s sentiment:

Our indices are based on closings. But I think that is the right thing to do. Many purchase and sales agreements are never consummated. Those that are away from the market are less likely to be completed. Using purchase and sales agreements to construct an index would be like taking limit orders on the stock exchange to compute a stock price index as if they were transaction prices.

Blitzer and Shiller both make good points about practicality.  Like Blitzer said, “these are the only consistent, reliable and accurate source of price data.”

So it’s a high-quality number. But it alone won’t help you call the turn.

Then umber will be out at 9:00 AM ET, and we’ll have live coverage here.

Please follow Money Game on Twitter and Facebook.

Join the conversation about this story »

See Also:

• Zillow: No One Actually Knows What’s Going On With Housing
• There Are Still 1.6 Million Homes Lurking In The Shadows
• DANIEL ALPERT: Housing Faces Enormous Headwinds, Price Could Fall Another 7%

UK house prices increased by £3,687 to £236,939 in March, a 4.9 per cent increase compared with the 2011 first quarter.

The figures, from Rightmove’s house price index, represent the largest first-quarter rise in property prices since 2004, boosting hopes for an continued improvement in the market for the rest of the year.

In London, where interest from overseas buyers has soared, house prices increased by 7.3 per cent compared with the first quarter of 2011, to £455,159.

The average asking price in Kensington and Chelsea exceeded £2 million for the first time.

Rightmove director, Miles Shipside, spoke out against the end of the stamp duty holiday on properties valued between £125,000 and £250,000.

The 1% stamp duty on houses in this price range will be imposed again from 24 March.

Mr Shipside said: “For a first time buyer it’s already hard enough to raise the necessary deposit and now, as well as potentially losing between £1,250 and £2,500 in stamp duty exemption, asking prices for their target property types have increased by over £5,000 in the last year as well.”

A recent report by the Building Societies Association suggested that consumer optimism in the housing market is returning.

Four out of 10 people surveyed in the 2012 first quarter said they expected house prices to rise during the year, according to the BSA’s Property Tracker study.

Optimism is greatest in south east England, where 53 per cent expect property prices to rise.

In contrast, just 30 per cent of those surveyed in Wales, said they expected an increase.

Although there was a general mood of optimism, 56 per cent were pessimistic about employment, and said that job insecurity was a barrier to the property market recovering.

Stamp duty was also seen as a barrier to recovery, with 12 per cent of those surveyed saying that stamp duty was a problem, compared with 10 per cent in the final quarter of 2011.

There’s just one datapoint on the scheduled today, and that’s the National Association of Homebuilder sentiment index.

It’s not the most anticipated datapoint there is, but we’re interested in it, as homebuilder sentiment has been growing nicely, and the improvement in the homebuilding industry is one force that’s counteracting some of the headwinds out there (gas, Europe, etc.).

Analysts expect a reading of 30, up from 29 last month. The number comes out at 10:00 AM.

Furthermore, this will be a big week for housing data.

Tomorrow we get housing starts and building permits. Wednesday we get existing home sales. Thursday brings the house price index, and Friday we get New Home Sales.

So by the end of the week, we’ll have a much clearer sense of the housing picture.

Please follow Money Game on Twitter and Facebook.

Join the conversation about this story »

See Also:

• GOLDMAN: About That Housing Recovery We Predicted…
• January Construction Spending CONTRACTS By 0.1%
• How To Take Advantage Of Warren Buffett’s #1 Investment Idea

Signs are emerging that the UK property market is slowly starting to improve.

According to the latest figures from The Royal Institution of Chartered Surveyors (RICS), the number of house sales increased in January, helped by first-time buyers rushing to secure a purchase before the end of the stamp duty exemption on homes under £250,000.

RICs reported that average sales per estate agent branch increased from 15.7 to 16 in February.

However, house prices continued to fall during the month, but at their slowest rate for 18 months.

Surveyors are not expecting prices to fall further, and anticipate that sales will continue to increase for the next three months.

Alan Collett, RICS housing spokesman, said: “With the recent upturn in activity brought on by the end of the stamp duty holiday, it seems that a renewed sense of optimism may be slowly returning to the property market.

“However, with affordable mortgage finance still out of reach for many potential first time buyers, it remains to be seen whether the more optimistic outlook for future sales can be sustained beyond the expiry of the stamp duty holiday.”

According to The Department for Communities and Local Government (DCLG) the average UK house price increased by 0.7% in January to £206,523.

In January 35,600 home loans were approved, a 22 per cent increase compared with January 2010, but 25 per cent lower than December according to the Council for Mortgage Lenders.

Yesterday the government launched two schemes designed to boost the housing market.

The NewBuy scheme offers 100,000 mortgages on newly built homes, requiring a deposit of just five per cent of the property value.

It is designed to help first-time buyers afford a mortgage on their first home while offering lenders some protection against borrowers defaulting on their mortgage.

The Right to Buy scheme has also been re-launched, giving up to two million social tenants the opportunity to buy their council home with a discount of up to £75,000 – treble its current level in most parts of the country.

Further changes to the scheme mean that additional properties sold must be replaced with new affordable homes for rent.