Three Makes a Trend

On Friday another indication of the current house market came up. For the 3rd straight month pointing to what some analysts say it is a sign of the so called recovery. In July an index of 20 cities shows an increase in prices for 1.4% Even though if compared to a year ago ( from July 2008 to July 2009 ) prices are down for a little over 13%. The industry experts were expecting a larger percentage loss, some where around 14% so the fact that we not only did not have the 14% decrease but an actual increase of a little over 1% shows signs of a recovery. Home prices are not the only indicator. Lower inventory and high traffic are also good indicators. On the broader picture there are also better retail sales and lower than expected job losses. "The rule of thumb is that three observations is a trend," "There have been three straight good reports, so, this is a trend." Of the 20 cities, Minneapolis recorded the biggest gain during July; with prices up 4.6%. San Francisco, up 3.3%, and Chicago, 2.7% higher, also recorded sizable gains.

The only price declines occurred in Las Vegas, where they fell 1.1%, and Seattle, down 0.1%.

Las Vegas has become the city hardest hit by foreclosures, which remain one of the big issues facing housing markets

The tax credit from the recovery plan is pointed as a major market stimulus. NAR estimated that an extra 350,000 homes will be sold because of it. There are bills in Congress that would extend the program and even expand it to every home buyer. If none of these are enacted, the market could suffer a reversal..