Marina del Rey Real Estate – Home Prices Take a Sharp Rise in Los Angeles
Home prices in 20 major cities rose 2.2% from April to May, another indication of the housing market’s continued recovery.
By Alejandro Lazo | Los Angeles Times
Home prices in the nation’s biggest cities rose sharply from April to May, fresh data show, underscoring the strength of the housing market’s spring recovery, which was marked by fewer foreclosures and tight inventory.
It was the second gain after seven months of declines for the Standard & Poor’s/Case-Shiller index of 20 large cities. The 2.2% rise was also the strongest month-over-month percentage gain in more than a decade. And the 0.7% year-over-year decline was the most moderate annual drop since 2010, helping fuel optimism among analysts that the carefully watched gauge may soon begin posting year-over-year gains.
Nevertheless, the slowing economy and a steady stream of foreclosed properties will ensure that the housing market doesn’t snap back to the heady days of the last bubble, experts said. The index may even give back some of its gains during the fall months when buying typically slows down, particularly in colder parts of the country such as the Northeast.
“What we are seeing in Case-Shiller is more evidence that housing did, in fact, firm as we entered into this spring.… It has been helped along by the lowest mortgage rates probably ever,” said Michael D. Larson, a housing and interest rate analyst for Weiss Research. “Going forward the real issue is whether the economic improvement we saw earlier this year is petering out.”
The rise in housing values comes at a tenuous time for the U.S. economy, with fears about an impending fiscal crisis at the end of the year beginning to hurt job growth domestically. Housing is highly dependent on a steady labor market, and a weak second-quarter economic report made it clear that the country remained in an anemic recovery.
The nation’s gross domestic product, the value of all goods and services produced in the country, grew at a meager 1.5% annual rate in the second quarter, down from 2% in the first quarter and 4.1% in the final quarter last year. Meanwhile, national job growth was sluggish in June, although California’s economy picked up with job gains in most industries.