Home prices up slightly in September

Home prices up slightly in September; analysts expect declines as foreclosures rise.

By Alan Zibel, AP Real Estate Writer
On 2:09 pm EST, Tuesday November 24, 2009
WASHINGTON (AP) -- The summer's trend of rising home prices faded at the end of the traditional home shopping season, two reports Tuesday showed.

The Standard & Poor's/Case-Shiller home price index of 20 major cities rose only 0.3 percent to 144.96 in September, but it was the fourth straight monthly increase. The seasonally adjusted index is now up more than 3 percent from its bottom in May, but still 30 percent below its peak in April 2006.
Another reading of home prices by the Federal Housing Finance Agency held steady from August to September.
Analysts expect prices to dip again this winter as foreclosures increase and economic growth remains modest. The government said Tuesday that the economy grew at a 2.8 percent rate last quarter -- less than originally estimated. And forecasts for the next several months are no better. Unemployment, meanwhile, could rise from the current 10.2 percent to as high as 11 percent next year.
"As long as the unemployment rate stays elevated, you're going to see pressure on the pace of foreclosures, which are going to find their way back onto the market, depressing prices," said Dan Greenhaus, chief economic strategist with Miller Tabak & Co.
Home prices are a key ingredient to rebuilding the economy. Homeowners feel wealthier when their property appreciates in value and are more likely to spend money. Rising prices also help millions of homeowners who owe more to the bank than their homes are worth.
Currently, roughly one in four homeowners are in that situation, according to First American CoreLogic, a real estate information company. And a record 14 percent of homeowners with a mortgage are either behind on their payments or in foreclosure, the Mortgage Bankers Association said last week.
"We are very worried about the potential for a huge wave of supply next year, both from private sellers and banks," wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics. "Prices could easily reverse their recent gains."
Spring and summer are typically the best times of the year for the housing market, because families prefer to move between school years. And this year's sales were aided by a tax credit for first-time buyers, which drove up sales nearly 30 percent between May and October.
In the winter months, fewer homeowners put their properties on the market. That means a bigger proportion of the sales will be foreclosures.
Last winter, sales of foreclosures and other distressed properties made up about half of all sales in February and March, compared with about a third over the summer, according to the National Association of Realtors.
With those low-priced properties dominating sales, Barclays Capital economist Michelle Meyer forecasts an 8 percent drop in prices before they hit bottom next spring, but said, "I don't expect another freefall."
Continuing economic woes will likely force many consumers to shorten their Christmas shopping lists. Consumer confidence in the economy improved slightly in November from October, but shoppers are still gloomy, the Conference Board reported Tuesday.
In the Case-Shiller report, home prices rose in 11 major cities, with the strongest gains in San Francisco and Minneapolis, according to the Case-Shiller report. That's a shift from the summer, when price gains were broad. In July, for example, prices were up in 17 cities.
Prices fell by the most in Las Vegas and Cleveland. Compared with a year earlier, the 20-city index was down about 9 percent, the smallest year over year decline since January 2008.
"With housing remaining an albatross around the economy's neck, nothing would perk things up more than some increases in home prices," wrote Joel Naroff, chief economist at Naroff Economic Advisors. "That seems to be happening."
The Commerce Department on Wednesday will release new home sales data for October. Economists expect a 2 percent increase from September to an annualized rate of 410,000, according to Thomson Reuters.
AP Economics Writer Jeannine Aversa contributed to this report.

Weak dollar, home sales data carry stocks higher

NEW YORK (AP) -- Investors halted stocks' three-day losing streak Monday, sending prices higher across the market on a lower dollar and better-than-expected home sales numbers.

AP - Specialists work on the floor of the New York Stock Exchange Monday, Nov. 23, 2009.
Major stock indexes soared more than 1 percent in afternoon trading, including the Dow Jones industrials, which touched a new 13-month high.
Investors found plenty reasons to buy as the day's developments pointed to two trends: an improving economy and interest rates that are expected to stay low:
--The National Association of Realtors news that October home sales rose more than 10 percent revived investors' optimism after disappointing data on the housing industry last week raised concerns about the strength of the economic recovery.
--Charles Evans, head of the Federal Reserve Bank of Chicago, was quoted as saying he saw little risk that the economy would slide back into recession, although unemployment is unlikely to fall until next summer. And James Bullard, president of the Federal Reserve Bank in St. Louis, said the U.S. Fed should continue to buy mortgage-backed securities after the program is supposed to expire in March. That would continue to keep interest rates low.
--The dollar, a key factor in stock trading in recent months, extended its pullback, sending prices for commodities including gold and oil higher and in turn, the stocks of companies that produce them.
Meanwhile, bond prices retreated as investors regained their appetite for risk.
Low interest rates and a resulting slide in the dollar have been big drivers behind the stock market's eight-month rally. Low interest rates enable investors to borrow cheaply and buy assets like stocks and commodities that have the potential to earn higher yields than cash.
Investors were buying Monday on somewhat contradictory forces in the market. The strength in housing is a sign of an improving economy, which could argue in favor of raising rates, while the dollar's weakness points to rates remaining low. Analysts say investors who still have plenty of available cash are primed to buy, and so the market may also be rising on its own momentum.
"There's still $2 trillion of cash that needs to find its way into the stock market," said Phil Orlando, chief equity market strategist at Federated Investors.
Orlando said investors will continue to look for dips in the rally as a way to get into the market, not wanting to end the year without participating in some of the big gains stocks have made.
"Bearish managers are sweating bullets that they're not going to be able to get that cash in the market and they need to do that," he said. "That is why any pullback we've seen this year has been met with a wave of cash that has pushed stocks up higher."
At the same time, many portfolio managers have cooled their buying, not wanting to risk losing the big returns they've made since stocks began rallying in March. Those opposing forces are likely to result in choppy trading over the next few weeks, analysts said, which will be exacerbated by light volume as the holidays approach.
The Dow Jones industrial average rose 124.32, or 1.2 percent, to 10,442.48, after losing 120 points over the previous three days. Earlier, the Dow rose as much as 177 points to a new 13-month high of 10,495.61.
The Standard & Poor's 500 index rose 13.94, or 1.3 percent, to 1,105.32, while the Nasdaq composite index rose 26.80, or 1.3 percent, to 2,172.84.
About four stocks rose for every one that fell on the New York Stock Exchange, where volume came to a low 629.2 million shares, compared with 803.1 million at the same time on Friday. Many traders were already on vacation for Thanksgiving, and the decreased volume can contribute to price swings.
The ICE Futures U.S. dollar index, a widely used measure of the dollar against other currencies, fell 0.7 percent in afternoon trading. As the dollar fell, gold prices surged to a new high of $1,174 an ounce. Oil rose 20 cents to $77.67 a barrel on the New York Mercantile Exchange.
The spike in commodities lifted the shares of energy companies and materials producers. Chevron Corp. rose $2.04, or 2.7 percent, to $78.81. Weyerhaeuser Co. gained $1.32, or 3.5 percent, to $39.18.
Bond prices fell as investors moved back into stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.38 percent from 3.37 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.03 percent from 0.01 percent.
The yield on the three-month bill briefly dipped into negative territory last week as worries about the economy took hold and investors retreated to safe havens like the dollar and government debt as they sold stocks.
Investors wanting to lock in profits as the year comes to a close are willing to earn very little to park their cash in a safe place.
"It's not a time for taking chances," said Quincy Krosby, market strategist at Prudential Financial.
TheRealtors said home sales rose 10.1 percent in October to the highest level in two and a half years, spurred by a tax credit for first-time homebuyers. Analysts had been expecting a 1.4 percent increase in sales. The credit, due to end at the end of the month, has been extended into 2010.
"You could be completely cynical and say this market is moving up today because volume is low and the dollar is weak, but I would have to add that we're getting confirmation on the sustainability of the economic recovery by the actual fundamentals," Krosby said, referring to the housing report.
In other trading, the Russell 2000 index of smaller companies rose 10.08, or 1.7 percent, to 594.76.
Overseas, Britain's FTSE 100 rose 2 percent, Germany's DAX index soared 2.4 percent, and France's CAC-40 jumped 2.3 percent. Markets in Japan were closed for a holiday.

Stocks jump as retail sales rebound in October

Stocks vault higher after retail sales rebound in October; Weakening dollar lifts commodities

By Stephen Bernard and Tim Paradis, AP Business Writers
On 2:21 pm EST, Monday November 16, 2009

NEW YORK (AP) -- Investors kept the stock market's upward momentum going Monday, sending shares sharply higher after retail sales rebounded more than expected in October and the dollar extended its slide.

AP - FILE - In this Sept. 15, 2008 file photo, a Wall St. street sign is seen near the ...
Major stock indexes rose more than 1 percent to new 13-month highs, including the Dow Jones industrial average, which jumped 145 points. The Standard & Poor's 500 index topped 1,110, the first convincing move above 1,100 after hovering around that level for the past month.
The Commerce Department said retail sales rose 1.4 percent in October, easily surpassing the 0.8 percent increase forecast by economists polled by Thomson Reuters. It was a sharp rebound following the 2.3 percent drop in September. Excluding the gain from autos, however, sales rose just 0.2 percent, half of what economists predicted.
Jamie Cox, a managing partner at Harris Financial Group, said the sales growth was a good sign heading into the holiday shopping season, especially because the data were not affected by factors such as sales tax holidays and government stimulus programs that had been present in the preceding months.
The weaker dollar lifted gold to a new record and pumped up prices of other commodities, including oil. That, in turn, helped shares of energy and materials companies.
Stocks briefly pared their gains after Federal Reserve Chairman Ben Bernanke said policymakers would monitor the dollar while at the same time repeating that the Fed will hold interest rates low until the economy strengthens. That gave a short-lived boost to the dollar.
The market's own dynamics fed some of the day's gains, analysts said.
Dan Deming, a trader with Stutland Equities, said the S&P 500's move above 1,100 gave some investors a shot of confidence and led to short-covering, which tends to amplify gains in the market. Short-covering occurs when investors have to buy stock after having earlier sold borrowed shares in a bet they would fall.
"We're breaking through the 1,100 mark, which is psychologically significant, and the market is seeing a little pop from that," Deming said.
In midafternoon trading, the Dow rose 154.86, or 1.5 percent, to 10,425.33. The broader S&P 500 index rose 19.28, or 1.8 percent, to 1,112.76. It traded above 1,100 in mid-October but hasn't closed above that benchmark since October last year. The S&P 500 index first finished above 1,100 more than a decade ago, in March 1998.
The Nasdaq composite index rose 34.52, or 1.6 percent, to 2,202.40.
The Russell 2000 index of smaller companies advanced 17.21, or 2.9 percent, to 603.49.
The ICE Futures US dollar index, which measures the dollar against other currencies, fell 0.6 percent. Gold reached a record $1,143.40 an ounce.
Investors have been using the weak dollar to finance purchases of higher-yielding assets. The move, what's known as a "carry trade," can further weaken the dollar.
Bond prices rose, pushing down yields. The yield on the benchmark 10-year Treasury note fell to 3.37 percent from 3.42 percent late Friday.
General Motors Co. said it lost $1.2 billion in the period since emerging from bankruptcy and the end of the third quarter on Sept. 30. Despite the loss, GM said it will begin to repay $6.7 billion in government loans and was seeing a stabilization in its business.
Home improvement retailer Lowe's Cos. reported lower profits that matched analysts' expectations and said it was seeing stabilization in some of the hardest hit housing markets. The company's shares fell 6 cents to $21.79.
Investors will get more insight into consumer spending from retailers Home Depot Inc., Target Corp. and TJX Cos., which are due to report earnings Tuesday.
Cox said the wide range of retailers reporting earnings during the week will provide signals into whether shoppers are willing to step up their spending and move back toward more expensive goods. Investors will be parsing any updated forecasts from the companies ahead of the holiday shopping season.
The stock market is coming off a strong week, which added more than 2 percent to major indexes. On Friday the market was buoyed by encouraging earnings reports and outlooks from major retailers Abercrombie & Fitch Co. and J.C. Penney Co. as well as The Walt Disney Co.
Crude oil rose $2.84 to $79.19 per barrel on the New York Mercantile Exchange.
Energy stocks rose. Baker Hughes Inc. rose $2.37, or 5.7 percent, to $43.82, while Devon Energy Corp. advanced $3.93, or 5.8 percent, to $71.66.
Freeport-McMoRan Copper & Gold Inc. rose $3.37, or 4.1 percent, to $84.94.
Ten stocks rose for every one that fell on the New York Stock Exchange, where volume came to 624.9 million shares compared with 557.4 million shares traded at the same point Friday.
Overseas, Japan's Nikkei stock average rose 0.2 percent after that country's economy grew for the second straight quarter, marking an end to the recession there.
Investors also drew confidence from the results of the 21-member Asia-Pacific Economic Cooperation forum, which said it would maintain stimulus spending until a global economic recovery is at hand.
Britain's FTSE 100 rose 1.6 percent, Germany's DAX index gained 2.1 percent, and France's CAC-40 rose 1.5 percent.

Proud Brother

Some of you may not know, but I have an older brother that lives in California. He too is in the construction business. My brother this year closed on his first home and took advantage of the $8K tax credit. I am so proud that he worked really hard to save up his down payment and position himself to afford his first home. But what I am really proud of is how he has overcome adversity.
When my brother was in high school he was in a bad car accident and eventually lost his left leg. When he lost his leg, I thought he would just give up on life. Was I wrong, really wrong. He is much more active than I have ever been (see photo). He is thriving at work and enjoying his beautiful family. I am such a proud brother. Way to go bro!

Dow jumps 204 to high for year...

By Tim Paradis, AP Business Writer
On 5:59 pm EST, Monday November 9, 2009
AP - FILE - In this Sept. 25, 2008 file photo, a Wall St. street sign is shown in front ...

NEW YORK (AP) -- The Dow Jones industrial average stormed to its highest level in more than a year Monday as a falling dollar boosted prices for gold, oil and other commodities. Stocks also jumped as investors grew more confident that governments around the world will keep interest rates low to help the global economy.
Energy and materials stocks led the market. The major indexes rose 2 percent and the Dow jumped 200 points for the second time in three days, reaching its highest level in 13 months.
News that the Group of 20 countries will keep economic stimulus measures in place signaled to investors that rates will remain low. With U.S. rates near zero, the G-20 news lessened demand for the dollar.
Even as investors are waiting for more signs that the economy is recovering, they've been focusing on the dollar when they make buy and sell decisions. Investors around the world see the dollar as weaker than other currencies, and so they're using it for what's known as "carry trade," to finance purchases of investments in other countries. That trend takes the dollar down further when those purchases are made.
But some analysts are questioning investors' stock moves given the still-weak economy, and warn that stocks and other investments could suffer big losses if the dollar were to turn higher.
"It feels like it's on fumes," said Sean Simko, head of fixed income management at SEI Investments in Oaks, Pa., referring to the market's advance. "Although fundamentals are catching up, they're not caught up."
He said the dollar's drop and the current surge in stocks and commodities are making it hard for investors to get a clear picture of how fast the economy is rebounding.
Still, many investors like a weaker dollar because it helps U.S. exporters by making their goods cheaper to overseas buyers and giving the companies a boost when they convert profits from abroad to dollars.
The ICE Futures U.S. dollar index, which measures the greenback against a basket of foreign currencies, fell to its lowest level in 15 months. The dollar rose last year and early this year but the index has been sliding for the past eight months since major stock indicators bounced off 12-year lows.
Although investors have based most of their decisions on the economy, they've also been funneling money into stocks when the dollar weakens and pulling it out when the greenback rises.
Commodities prices, meanwhile, tend to rise when the dollar is down, so gold topped $1,100 an ounce. Crude oil rose $2 to settle at $79.43 per barrel on the New York Mercantile Exchange, helped in part by Tropical Storm Ida, which threatened the Gulf of Mexico.
Energy and materials stocks rose along with commodities prices, and investors' enthusiasm for those stocks spilled over to other industries.
Brian Battle, vice president of trading at Performance Trust Capital Partners in Chicago, said the strength of the carry trade is giving an artificial lift to a range of assets, including stocks.
"There's cheap money that's going to be pumping its way into the system," he said. "That money is finding a home in the currency and commodity markets."
The Dow rose 203.52, or 2 percent, to 10,226.94, its highest finish since Oct. 3, 2008. The Dow's gain of 455 points, or 4.7 percent, since Wednesday is its biggest four-day climb since July.
The index rose as high as 10,228.23, topping its previous 12-month trading high of 10,119.46 set last month.
The broader Standard & Poor's 500 index rose 23.78, or 2.2 percent, to 1,093.08, its sixth straight advance. The Nasdaq composite index rose 41.62, or 2 percent, to 2,154.06.
Five stocks rose for every one that fell on the New York Stock Exchange, where consolidated volume came to 4.6 billion shares, compared with 4.3 billion Friday.
Bond prices were little changed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, slipped to 3.49 percent from 3.50 percent late Friday.
The dollar's slide also came as the International Monetary Fund said the dollar remained "on the strong side." That added to selling pressure.
Jason Pride, director of research at Haverford Investments outside Philadelphia, isn't troubled by the slide in the dollar because he sees it as another sign that fear in the market is easing after the pounding of the past two years. Investors rushed into the dollar as they sought the safest assets.
"As the economy gets back to normal from what were very dire circumstances earlier this year the equity markets are going to be moving up and the dollar should be falling," he said.
"You're seeing a lot of pieces move off each other and the dollar is driving a lot of it," he said.
Retailers had some of the biggest gains in the market's broad advance. Abercrombie & Fitch Co. rose $2.58, or 7.4 percent, to $37.59 after analysts said international growth would boost growth at the teen apparel retailer. The company is scheduled to release its fiscal third-quarter numbers Friday.
Investors are looking for any insight into how much consumers are spending as the holidays approach. J.C. Penney Co., Macy's Inc. and Wal-Mart Stores Inc. are among the stores expected to post quarterly results this week.
Among energy stocks, Exxon Mobil Corp. rose 69 cents, or 1 percent, to $72.85. Gold producer Newmont Mining Corp. rose $1.52, or 3.1 percent, to $50.56 and hit a new high for the year.
The Russell 2000 index of smaller companies rose 11.96, or 2.1 percent, to 592.31.
Overseas, Britain's FTSE 100 rose 1.8 percent, Germany's DAX index jumped 2.4 percent, and France's CAC-40 rose 2.1 percent. Japan's Nikkei stock average rose 0.2 percent.

Obama Signs Homebuyer Tax Credit Extension

RISMEDIA, November 9, 2009—President Barack Obama has approved the first-time homebuyer tax credit extension which will extend the tax credit until April 30, 2010.
The extension is part of a $24 billion economic stimulus bill that will extend the $8,000 tax credit for homebuyers who are purchasing their first home from the current November 30 deadline and expands the program to offer a credit of $6,500 to homeowners who have lived in their current home for at least five years and are seeking to relocate.
The following details apply to the homebuyer tax credit expansion:

Who is Eligible-First-time homebuyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.-Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.-All U.S. citizens who file taxes are eligible to participate in the program.
Income LimitsHomebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.-For married couples filing a joint return, the combined income limit is $225,000.-Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.-The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.
Effective Dates-The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.
Types of Homes that Qualify-All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.
Tax Credit is Refundable-A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.
-For example:-A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit).-A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).-All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return.
Payback ProvisionsThe tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.
The www.federalhousingtaxcredit.com site is being updated. Check the site next week for more detailed information on the new tax credit.
For more information, visit http://www.nahb.org/.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
Don’t miss these top headlines on RISMedia.com:Where Are All the REOs?15 Billion in Credit Card Fees Charged! …and the New “Credit Card Act”Read more: http://rismedia.com/2009-11-08/obama-signs-homebuyer-tax-credit-extension/#ixzz0WJ3lfmPx

Cisco beats forecasts, points to recovery

NEW YORK (Reuters) - Cisco Systems Inc (NasdaqGS:CSCO - News) posted a stronger-than-expected quarterly profit and signaled that recovery was well on its way, as businesses are investing in network equipment again after cutting back for the past year.
Chief Executive John Chambers gave a revenue forecast for the current quarter, its fiscal second, that topped Wall Street expectations and said that business conditions had hit bottom at least six months ago. Shares of Cisco rose 3.7 percent.
"Q4 fiscal 09, as we indicated in last quarter's conference call, looking back, was clearly the tipping point," Chambers told analysts on a conference call on Wednesday.
Cisco also said its board of directors authorized up to $10 billion in additional share repurchases, bringing its total outstanding repurchasing program to around $13.1 billion.
Cisco is the world's top vendor of routers, switches and other network equipment used by global businesses, including phone companies as well as governments. Many of those customers had put off large investment decisions during the recession, but analysts have said many were beginning to shift gears toward more spending to cope with growing Internet traffic.
Revenue in its fiscal first quarter, ended October 24, fell 13 percent from a year earlier to $9.0 billion. But that was up 6 percent quarter-on-quarter, and higher than the average Wall Street forecast of $8.7 billion, according to Thomson Reuters I/B/E/S.
The company forecast fiscal second quarter revenue to increase 1 percent to 4 percent from a year earlier, or a rise of 2 percent to 5 percent compared to the first quarter. The average Wall Street estimate for the second quarter had implied a revenue decline of 1.3 percent year on year.
"It's better than expected. On first blush, it's very good news, and will be good for the market, but we need to hear what they say about capital spending," said Jim Awad, managing director at Zephyr Management.
Net profit was $1.8 billion, or 30 cents a share, compared with $2.2 billion, or 37 cents a share, a year earlier. Excluding items, profit was 36 cents a share compared to 42 cents a share a year earlier, and higher than the average Wall Street forecast of 31 cents.
Shares of Cisco rose to $24.15 in after-hours trading from their Nasdaq close of $23.29. The stock has climbed more than 40 percent since the start of the year.
(Reporting by Ritsuko Ando, additional reporting by Ian Sherr and Caroline Valetkevitch; Editing by Bernard Orr and Tiffany Wu)

Sweet Home Oregon

I just got back from Alabama. My family and I visited close friends. I love the South. The people are so sweet and if you want the best BBQ, visit the South. Pictured is my stuffed potato. It was stuffed with butter, sour cream, cheese, smoked beef brisket, BBQ sauce, ranch dressing, and topped with dill pickles. Do you believe that this calorie buster was only $6.99???

As you know, when ever I take a vacation, I love to check out the local real estate market. Well, no surprise, the homes are $50K-$100K cheaper than our homes here in the Portland Metro Area. The cost of living is much better there, but you cannot beat the lifestyle and weather here. I loving visiting the South, but love coming home to the Pacific NW even more!