Karl Case, the Case in the S&P/Case-Shiller Index of home prices, sees gains ahead for the housing market, but nothing huge.
Case, an emeritus economics professor at Wellesley College, tells The New York Times he is impressed with recent increases in home prices. His index rose 4.3 percent in October from a year earlier, the biggest gain since May 2010.
He’s particularly wowed by price gains in Phoenix and California. Phoenix was the top riser of the index’ 20 cities in October — 21.7 percent. San Francisco home prices gained 8.9 percent.
Editor's Note: 'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.
“Phoenix is amazing,” Case says. “California is strong, and it’s doing what it’s done in every other cycle, which is important, because California makes up one-fourth of the housing value in the United States.”
To be sure, Case isn’t jumping up and down. “[R]esidential real estate is not going to go up like a rocket ship,” he says. It takes time to rebound from a housing depression.
The bottom line for Case: “There are a lot of reasons to be optimistic, but cautiously so.”
Others too expect gains in the home market this year. “We expect housing to continue this momentum into 2013 and in fact show stronger growth rates due to pent-up demand,” Pimco portfolio manager Mark Kiesel tells Bloomberg.
“Residential investments potentially could grow between 20 percent and 30 percent,” adding up to 0.75 percentage point to gross domestic product, he says.
Editor's Note: 'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.
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