Calloway Investments

by Francesca Levy
Friday, September 18, 2009
provided by www.forbes.com

*(STORY CONTINUED BELOW)

Where Home Prices Are Likely to Rise:

Charlotte, N.C.

Percentage Change:

1 Year, 2009: -8.15%

3 Year, 2009-2012: 3.54%

5 Year, 2009-2014: 12.20%
Boston, Ma.

Percentage Change:

1 Year, 2009: -9.75%

3 Year, 2009-2012: 4.48%

5 Year, 2009-2014: 20.44%

Baltimore, Md.

Percentage Change:

1 Year, 2009: -13.32%

3 Year, 2009-2012: -3.33%

5 Year, 2009-2014: 9.22%

Atlanta, Ga.

Percentage Change:

1 Year, 2009: -14.91%

3 Year, 2009-2012: 0.98%

5 Year, 2009-2014: 11.35%

Austin, Texas

Percentage Change:

1 Year, 2009: 0.29%

3 Year, 2009-2012: -1.54%

5 Year, 2009-2014: -1.01%
Though home prices in many areas still have room to drop, economists say some of the country’s real estate markets are showing early signs of repair. A two-year slide in values has eased its stomach-turning pace, and some analysts expect the national market to bottom out by mid 2010.

That’s the good news.

But just as subprime lending, the housing bubble and the country’s subsequent wave of foreclosures had distinct consequences in separate areas of the country, the recovery will also look dramatically different by region.

When prices do rise, they’ll inch, rather than soar, and some areas won’t match their pre-bubble prices for a decade, according to home price forecasts by Moody’s Economy.com.

In cities in Florida, such as Miami and Orlando, housing prices peaked late, leaving ample time for developers to go on a building bender. This has resulted in a bloated inventory. As a result, these areas may have a long wait before real estate costs level out. In Texas metros like Houston and Dallas, sustained economic health and less exposure to the 2004-2006 run-up in prices are expected to help homeowners there weather the bust better than most.
BEHIND THE NUMBERS:

Moody’s Economy.com provided Forbes with a housing price forecast for the country’s 40 largest metropolitan statistical areas (or metros)–geographic entities defined by the U.S. Office of Management and Budget for use in collecting statistics. The forecast predicts the percent change in home prices over one year, three years and five years, using data from the S&P/Case-Shiller Home Price Index. In the MSAs for which Case Schiller does not publish numbers, Moody’s used a weighted average of metropolitan divisions within those areas.

Moody’s calculates future changes in home price by measuring both long-term demographic and economic fundamentals, like income and population changes; and changes caused by short-term supply and demand shifts.

HOUSING SWINGS:

The data provider’s forecasters evaluated not only the relationship between such drivers in each metro, but the effect of overlying economic principles. Typically, prices will continue on the trajectory they are on, a trend that economists call persistence.

“When people see prices rising, they think housing is a good investment,” says Celia Chen, Moody’s Economy.com research staff senior director, specializing in housing economics. For some time afterward, these buyers will bite, helping to push prices even higher.

But, “sentiment can turn when prices are proceeding very quickly,” says Chen, referring to post-bust buyer reaction. “At some point people can think, ‘it’s not realistic, nothing is supporting this increase,’ and there’s a drop in demand for housing.”

Moody’s predicts a 16.08% decrease in prices nationwide by the end of the year. By 2012, however, prices will be 3.7% above 2009 levels, and by 2014 they will have nearly reverted to their pre-2009 state.

THE CRISIS IN THE COUNTRY’S METROS:

But nationwide data doesn’t tell the whole story. To understand the effects of the crisis one must examine thousands of micro-economies.

“This whole cycle didn’t play itself out uniformly across the country in magnitude or timing,” says Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida. “All housing markets are truly local. They’re a function of the structure of the local economy.”

Moody’s data show how prices will move relative to where they are now. Thus the depths to which prices have fallen in many metros means that what looks like a dramatic recovery may only reflect a prior correction that was just as severe.

In San Jose, for example, the five-year forecast calls for a 23.04% jump in prices. That sounds impressive until you note that at the one-year mark, prices will have fallen by more than that–25.14%.

But the numbers are useful for sketching out the potential shape of a recovery, and many experts agree with Moody’s outlook.

“Recent trends show a slowing of declining prices and the formation of a bottom,” says Susan Wachter, a professor of real estate at the University of Pennsylvania’s Wharton School. But she stops short of heralding a new real estate boom. “The big picture here is that there’s no rebound. I think it is in fact far more likely that we will see an L-shaped outcome.”

COMPLETE STORY CAN BE READ AT:
http://finance.yahoo.com/real-estate/article/107740/where-home-prices-are-likely-to-rise.html?mod=realestate-buy#top30

By Julianne Pepitone , CNNMoney.com staff wrier Last Updated: August 20, 2009: 1:12 PM ET

NEW YORK (CNNMoney.com) — An index of economic indicators rose in July for a fourth straight month, in another sign that the recession is bottoming, said a report released Thursday.

The Leading Economic Index rose 0.6% in July, after a 0.8% increase the previous month, according to a report from the Conference Board, which has a membership of executives from around the world.

“The indicators suggest that the recession is bottoming out, and that economic activity will likely begin recovering soon,” said Ken Goldstein, economist at The Conference Board, in a prepared statement.

The Leading Economic Index is based on 10 components, six of which increased in July: interest rate spread, average weekly initial jobless claims, average weekly manufacturing hours, index of supplier deliveries, stock prices, and new orders for nondefense capital goods. Meanwhile, readings fell for consumer expectations, real money supply and building permits.

This index reading is the latest sign of a nascent recovery. Earlier this month, the Federal Reserve released a statement that said the economy is “leveling out .” The central bank cautioned that activity will remain weak in the near term, but it marked the Fed’s most bullish assessment of the economy in more than a year.

And this week the International Monetary Fund’s chief economist said the global economic recovery has begun, but cautioned that in order to see sustained economic gains the U.S. needs to focus on exports.

While the battered labor market remains weak, the unemployment picture showed some signs of improvement in July . The Labor Department reported the fewest job losses since August 2008, and the unemployment rate fell for the first time since April 2008.

However, no single indicator marks an official recovery. Only the National Bureau of Economic Research can declare the recession is over.

Five companies based in the Charlotte region are included in Stores magazines Top 100 Retailers List, which is based on 2007 revenue.

Lowes Cos. Inc. (NYSE:LOW) ranks No. 9, with sales of $48.3 billion last year.

Supermarket owner Delhaize America Inc. of Salisbury ranks No. 21, with sales of $18.2 billion. The company, owned by Delhaize Group (NYSE:DEG) of Belgium, operates the Food Lion and Hannaford Bros. Co. supermarket chains.

Discount retailer Family Dollar Stores Inc. (NYSE:FDO) of Matthews is No. 51, with revenue of $6.8 billion.

Charlotte-based Belk Inc. ranks No. 87, with sales of $3.8 billion.

And Harris Teeter Inc. ranks No. 98, with sales of $3.3 billion last year. The supermarket chain is a subsidiary of Ruddick Corp. (NYSE:RDK) of Charlotte.

Arkansas-based Wal-Mart Stores Inc. (NYSE:WMT) tops the list with 2007 sales of $378.8 billion.

Stores magazine is a publication of Stores Media, the communications group of the National Retail Federation. The organization is the world’s largest retail trade association.

Story taken from Charlotte Business Journal at the following link:

http://charlotte.bizjournals.com/charlotte/stories/2008/06/30/daily14.html