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Posts Tagged ‘Dean Baker’

Home Prices Post Largest Gain in Two Years Plus

November 30th, 2012 Comments off

According to the S&P/Case-Shiller Index, home prices registered the largest gain in over two years, moving up 3.6 percent in the third quarter over Q3 2011. CNNMoney reports the increase was the biggest since the second quarter of 2010 when the homeowner’s tax credit of up to $8,000 ended. A drop in foreclosures to a five-year low, an improving jobs market and record low interest rates have sparked home sales and home building. Dean Baker, of the Center for Economic and Policy Research, says “We’ll probably do better than inflation for the next few years, and people who have been underwater on their mortgage will get out from that, and build some equity.” Only Chicago and New York of the 20 markets surveyed showed a modest price decline from a year ago. As MHProNews has learned, Phoenix, AZ, which was one of the hardest hit cities following the housing crash, experienced the largest increase, with prices 20.4 percent higher than last year.

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Full Housing Recovery: Ten Years Away?

September 5th, 2012 1 comment

originationnews says while home values are expected to rise around four percent this year, the increase is driven more by low inventory than by rising demand. The rise in some markets is due to investors buying especially lower-priced homes, and flipping them in six months to a year as prices improve. Dean Baker of the Center for Economic and Policy Research, noting the vacancy rate rising on single-family homes in Phoenix, where prices have increased 14 percent since 2011, says, “That’s consistent with the story of speculation.” Unlike many others in the housing industry, he will not be surprised if prices fall again. He says house prices typically rise with inflation, currently at two percent, which means it will be ten years before prices return to their peak in 2006, especially given all the underwater mortgages. MHProNews has learned that many of the new jobs that have been created recently are lower paying jobs, which may coincide with the fact that many of the homes being sold are lower priced homes.

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Home Prices Drop in January, May Decline More

March 7th, 2011 Comments off

According to CNNMoney.com, the government reported another drop in new home construction in January, prompting Yale economist Robert Shiller to say home prices may continue to fall another 25 percent.  Shiller compares changes in home prices to income growth, noting that home prices have risen more than income since the 1990s.  Albert Sanders, director or Real Estate Entrepreneurship at George Mason University, says prices would have to drop another 15 percent to return to a normal ratio.  Dean Baker, co-director of the Center for Economic and Policy Research, thinks the fall may only be 10-15 percent.  He adds that the West Coast may see more prices falling than Texas or the Midwest.  Others say home prices may or may not fall, only that you should not expect to gain a return on your investment in less than five years.