The stock market tells us we are bottoming. The banks are making money and home prices are rising or at least not declining so fast, according to some indexes. The info coming from these indexes seems contradictory or non confirming. The numbers are all over the map and so its hard to tell what is really happening.

The FHA Index was released today and it sent the market up on the good news that homes declined less in price this quarter. Prices rose a seasonally adjusted 0.7% in February after a revised 1% increase in January, the agency said. Prices rose in six of nine regions in February, led by a 3.8% gain in the Pacific region.
The focus was on the fact that U.S. home prices rose in February for the second straight month, but are still down 6.5% in the past year. Case Schiller reports homes are down 19% year over year in January.

Why the Big discrepancy

FHA Index is loosely based on the Case Schiller index. They both measure pruchase prices, not listing prices for homes. The FHA index measure includes the entire U.S. while the Case Schiller Index measures 20 Metropolitan Areas. The largest majority of the foreclosures are in a handful of states led by California, Nevada and Florida. These three of 20 measured areas, for the Case Schiller Index, account for the larger declines reported by Case Schiller. The FHA Index measure the entire country and as such the foreclosure states are more diluted. The second reason is the FHA Index measures only FHA loans although its breadth is wider, its depth is not, tracking only 70% of the market and less of the high priced markets because of the jumbo loan limitations.


Its hard to determine exactly what is happening, but precise numbers aside, I think its fair to say the worst is behind us. Its also fair to say that we are very broken and that it will take years before we recover. The IMF chart indicates the world economy still shrinking in 2009. Recoveries can take years and I think this one will....its not your ordinary recovery,

Obama is doing nothing less than a restructure of the basic economic engine. We will be moving from a consumer based, borrow and spend economy to one much smarter, leaner and cleaner.

Thanks for Reading

Howard Bell
www.yourpropertypath.com
A web site of over 450 articles related to real estate focused primarily on property management.

Your Property PathSF
http://yourpropertypath.blogspot.com/
Trade talk for the San Francisco real estate industry. Your source for property management tips, policies and market trends.

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