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RERC © REAL ESTATE REPORT - THE NATIONAL REAL ESTATE AUTHORITY
Consumer Confidence
Index
Consumer confidence improved during fourth quarter 2011, although it declined to 61.1
points in January 2012. This drop was a reminder of the uncertainty regarding the sustainability
of the economy. Consumers were particularly concerned about their future
income.
S&P 500
120
100
80
60
40
20
Jan-03
Jun-03
Nov-03
Source: The Conference Board.
Beginning of Month Adjusted Closing Price
1600
1500
1400
1300
1200
1100
1000
900
800
700
600
Source: S&P.
Index of Leading Indicators
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Apr-04
Sep-04
Feb-05
Jul-05
Dec-05
May-06
Oct-06
Mar-07
Aug-07
Jan-08
Jun-08
Nov-08
Apr-09
Sep-09
Feb-10
Jul-10
Dec-10
Jul-11
Jan-12
The S&P 500 increased slightly before leveling off during fourth quarter 2011, ending
the year at 1,244.58, about where it closed in 2010. Utilities, consumer staples, and
health care were the S&P’s top performers in 2011, while financial and material stocks
declined.
Percent Change Month Ago
Apr-06
1.2
1.0
0.8
0.6
0.4
0.2
0.0
-0.2
-0.4
-0.6
-0.8
Aug-06
Dec-06
Source: The Conference Board.
Apr-07
Aug-07
Dec-07
Apr-08
Aug-08
Dec-08
Apr-09
Aug-09
Dec-09
Apr-10
Aug-10
Nov-10
Mar-11
Jul-11
Dec-11
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
The Conference Board’s Index of Leading Indicators rose 0.4 percent to 94.3 in December
2011. The rising interest rate spread was the biggest contributor to this month’s
gain, but improving jobless claims was the second largest. *Please note that some
components of the Conference Board Index were updated. Due to these changes, the
old and new indices are not comparable.
120
100
80
60
40
20
1600
1500
1400
1300
1200
1100
1000
900
800
700
600
1.2
1.0
0.8
0.6
0.4
0.2
0.0
-0.2
-0.4
-0.6
-0.8
Pending Home Sales Index
Index
120
110
100
90
80
70
60
Existing Home Sales
New Home Sales
WINTER 2012 | VOL 40 | NO 4
Feb-10
Apr-10
Jun-10
Aug-10
Oct-10
Dec-10
Feb-11
Apr-11
Jun-11
Aug-11
Oct-11
Dec-11
Source: NAR.
The Pending Home Sales Index is still up 5.6 percent from a year ago, despite declining
3.5 percent to 96.6 in December 2011. Sales are expected to gain momentum during
the second half of 2012 as the number of foreclosures decreases and excess inventory
is cleared away.
Millions
8.0
7.0
6.0
5.0
4.0
3.0
Source: NAR.
Jul-05
Nov-05
Mar-06
Jul-06
Nov-06
Mar-07
Jul-07
Nov-07
Mar-08
Jul-08
Nov-08
Mar-09
Jul-09
Nov-09
Mar-10
Jul-10
Nov-10
Mar-11
Jun-11
Sep-11
Dec-11
Existing home sales increased to an annualized rate of 4.61 million units in December
2011. In addition, sales are up 3.6 percent compared to a year ago, and as a result,
housing inventory dropped to 6.2 months, the lowest reading since early 2006. Despite
large downside risks for housing, fundamentals are looking more positive.
Thousands
450
400
350
300
250
Source: NAR.
Feb-10
Apr-10
Jun-10
Aug-10
Oct-10
Dec-10
Feb-11
Apr-11
Jun-11
Aug-11
Oct-11
Dec-11
Sales of new homes decreased in December 2011 to 307,000. Compared to a year ago,
home sales dropped 7.3 percent, for the largest year-over-year decline since April 2011.
Despite this, sales are expected to improve in 2012 as the economy generates more jobs
and confidence increases.
© 2012 REAL ESTATE RESEARCH CORPORATION. ALL RIGHTS RESERVED.
120
110
100
90
80
70
60
8.0
7.0
6.0
5.0
4.0
3.0
450
400
350
300
250