Karl Case, co-creator of the S&P/Case-Shiller home-price index, said he sees a “lot of positive stuff” in a report today on home prices in June that may indicate a market beginning to recover.
U.S. housing may stabilize or possibly weaken a “little” in the next year, depending on the economy’s performance, Case said in a radio interview today on “Bloomberg Surveillance” with Tom Keene.
Home prices in 20 cities rose more than forecast in June from a year earlier, reflecting the influence of a government tax incentive and a sign the market was stabilizing before sales plunged in July.
“There’s an awful lot of positive stuff here in our numbers today,” said Case, a former economics professor at Wellesley College in Wellesley, Massachusetts. “You’ve had a continuing increase of almost a year now.”
The S&P/Case-Shiller index of property values increased 4.2 percent from June 2009, the group said today in New York. The median estimate of economists surveyed by Bloomberg News called for a 3.5 percent advance.
The housing market is “not quite stabilized yet, but it looks like it’s beginning to,” Case said in the interview. “So I’d say another couple of years before you can really declare victory.”
The Case-Shiller index is a moving three-month average, which means the June data are still being influenced by transactions in April and May that benefited from the government incentive. A pullback in demand since the credit ended, mounting foreclosures and an unemployment rate near a 26-year high may weigh on prices in coming months.
“It generally takes four or five years to stabilize the whole market,” Case said. “We’re into about four now.”