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Monday, February 13, 2012
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Cleveland-area home prices rose modestly in June, but ominous signals remain
Blog entry: August 31, 2010, 11:25 am | Author: SCOTT SUTTELL
A few thoughts and links for the day: The much-watched S&P/Case-Shiller Composite Index, which measures home prices in 20 big U.S. markets, including Cleveland, rose slightly in June from May and from a year ago, though prices lost momentum as a government tax credit expired.Cleveland was one of 17 cities that posted a month-to-month increase in June; prices here were up 1.3% from May and up 0.8% from June 2009.
While housing prices have rebounded from crisis lows, “other recent housing indicators point to more ominous signals as tax incentives have ended and foreclosures continue,” the index compilers wrote in their summary of the findings.
This statement from David M. Blitzer, chairman of the Index Committee at Standard & Poor's, isn't very encouraging: “The worry starts when you remember that the Homebuyers' Tax Credit has expired, foreclosures are still at high levels, and July data on home sales and starts were very, very weak. The inventory of unsold homes and months' supply data were particularly troubling. If this relative weakness in demand continues, it will likely filter through to home prices in coming months.”
Could I interest you in a bit more economic pessimism?
Parma Heights resident James E. Naso probably speaks for a lot of people with this letter to the editor of The Wall Street Journal, responding to an Aug. 25 op-ed piece titled “The case for economic optimism.”
The op-ed noted that investments in equipment and software have been strong, as is the outlook for exports.
Mr. Naso writes that the op-ed author, Ross DeVol “paints a rosy picture of the economy heading into 2011 that his research suggests could occur if this White House and this Congress, the very engineers of our mass economic destruction, do certain things.”
He concludes his short letter this way: “The fact is that this economy remains paralyzed in the face of a government that is passing laws with economic ramifications it can't even begin to comprehend. That the whim of the government and not the workings of the free market should be the hinge on which the economy turns should frighten every American.”
To avoid coming off like a complete doomsayer, I should note that consumer confidence numbers improved a bit in August.
Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland, seems a bit surprised by the development, based on his comment in this piece from Reuters.
“Between what we saw with new home sales, construction spending, the Philly Fed being weak, that sort of pointed to a lower (consumer confidence) figure, at least sentiment appeared that way," he says.
Cliffs Natural Resources Inc. is looking to draw attention to its strong growth record, and it seems to have caught the eyes of analysts at Citigroup Inc.
In a research note to investors on Monday, the firm's equities research division reiterated a “buy” rating on shares of Cliffs with a price target of $87, citing higher iron ore price projections and the company's acquisition of INR Energy.
That target would leave a lot of room for growth. Shares of Cliffs this morning were trading just below $61.
The Associated Press notes that LNB Bancorp Inc. was one of the 10 largest volume gainers Monday on the Nasdaq exchange.
About 446,300 LNB shares changed hands, which the AP notes is a 4,270% increase over its 65-day average volume.
Our finance reporter, Michelle Park, this week covered longtime bank investor Umberto Fedeli's effort to bring about changes at the parent company of Lorain National Bank.
You also can follow me on Twitter for more news about business and Northeast Ohio.
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