Residential real estate prices probably dropped in November by the most in a year, signaling housing has yet to join the U.S. rebound, economists said before a report today. The S&P/Case-Shiller index of home values in 20 cities fell 1.6 percent from November 2009, the biggest 12-month decrease since December 2009, according to the median forecast of 26 economists surveyed by Bloomberg News. Another report may show consumer confidence rose in January, extending a see-saw pattern of gains and losses since the recession ended in June 2009. Mounting foreclosures will probably throw more properties on the market this year, further depressing prices, homeowners’ equity and construction. The lack of a sustained housing rebound and unemployment above 9 percent are among reasons the Federal Reserve may announce this week it’ll complete a second round of stimulus that will pump $600 billion into the economy by June. “The large overhang of unsold houses will weigh on prices,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “Housing is lagging the economic recovery. It is one factor encouraging the Fed to remain on the sidelines.” The S&P/Case-Shiller index, based on a three-month average, is due at 9 a.m. New York time. Survey estimates ranged from declines of 2.1 percent to 0.1 percent, after a 0.8 percent drop in October. The New York-based Conference Board’s consumer confidence gauge, due at 10 a.m., rose to 54 from 52.5 in December, according to the survey median. Estimates ranged from 50 to 57.3. Mixed Signals The projected gain would contrast with the Thomson Reuters/University of Michigan preliminary consumer sentiment index, which fell this month as Americans fretted higher gasoline prices would hurt their finances. The Case-Shiller report may show home prices fell 0.8 percent in November from the prior month, the fifth straight decline, according to the Bloomberg survey. The year-over-year gauges provide better indications of trends in prices, the group has said. The panel includes Karl Case and Robert Shiller, the economists who created the index. The industry is trying to regain its footing after demand plunged following the expiration of a buyer tax incentive of as much as $8,000. Sales slumped in mid-2010, causing prices to slide and builders to pull back. For 2011, most Districts anticipate “continued weak conditions” in residential real estate, the Fed said Jan. 12 in its Beige Book report, based on anecdotal information. The New York, Atlanta, Chicago, and San Francisco areas mentioned “distressed properties placing downward pressure on prices,” it said. More Foreclosures Industry projections reinforce the concern. The number of homes receiving a foreclosure filing will climb about 20 percent in 2011, reaching a peak for the housing crisis, said RealtyTrac Inc., an Irvine, California-based data seller. Home values may drop as much as 11 percent through the first quarter of 2012, which would put them 36 percent below their 2006 peak, according to a Dec. 8 Morgan Stanley report. That helps explain why the S&P Supercomposite Homebuilder Index, which includes Toll Brothers Inc. and Lennar Corp., underperformed the broader S&P 500 Index in 2010. Developers remain cautious. Housing starts fell in December to the lowest level since October 2009, Commerce Department figures showed. Miami-based Lennar, the third-largest U.S. homebuilder by revenue, is among companies bracing for a slow rebound. It’ll be a “long and bumpy” housing recovery, Stuart Miller, chief executive officer, said on a Jan. 11 conference call with analysts. “Shadow inventory and foreclosures will continue to impact individual markets on the supply side, while the pace of recovery in the job market will influence consumer confidence and demand.” Bloomberg Survey ============================================================== Case Shil Case Shil Consumer FHFA Monthly Monthly Conf HPI MOM% YOY% Index MOM% ============================================================== Date of Release 01/25 01/25 01/25 01/25 Observation Period Nov. Nov. Jan. Nov. -------------------------------------------------------------- Median -0.8% -1.6% 54.0 0.0% Average -0.8% -1.5% 54.2 0.0% High Forecast -0.1% -0.1% 57.3 0.5% Low Forecast -1.5% -2.1% 50.0 -1.1% Number of Participants 23 26 71 14 Previous -1.0% -0.8% 52.5 0.7% ---------------------------------------------------------------- 4CAST Ltd. --- -2.0% 54.5 0.2% ABN Amro Inc. -0.5% --- 54.0 0.1% Action Economics --- --- 55.0 --- Aletti Gestielle --- --- 53.0 --- Ameriprise Financial --- --- 54.0 --- Banesto --- -1.6% 53.8 --- Bank of Tokyo- Mitsubishi --- --- 53.8 --- Bantleon Bank AG --- --- 54.0 --- Barclays Capital -0.8% --- 55.0 0.0% Bayerische Landesbank --- --- 54.0 --- BBVA -0.4% -0.7% 54.0 0.2% BMO Capital Markets --- -1.4% 53.0 --- BNP Paribas --- --- 54.0 --- BofA Merrill Lynch Research --- -1.2% 55.0 --- Briefing.com --- -1.0% 53.5 --- Capital Economics -1.0% -2.1% 50.0 0.0% Citi --- --- 54.0 --- Commerzbank AG --- -1.9% 53.0 --- Credit Agricole CIB --- --- 53.5 --- Credit Suisse --- --- 54.0 --- Daiwa Securities America --- --- 53.0 --- Danske Bank --- --- 55.5 --- DekaBank --- --- 57.0 --- Desjardins Group --- -1.2% 51.0 --- Deutsche Bank Securities --- --- 55.0 --- Deutsche Postbank AG --- --- 54.5 --- DZ Bank --- -0.1% 56.0 --- Fact & Opinion Economics --- -1.0% --- --- First Trust Advisors --- --- 54.3 --- FTN Financial --- --- 54.0 --- Goldman, Sachs & Co. -0.5% --- 53.5 --- Helaba --- --- 54.0 --- High Frequency Economics -0.5% --- 56.0 --- HSBC Markets -0.5% --- 55.0 -0.5% Hugh Johnson Advisors --- --- 52.9 --- Ibersecurities --- --- 53.0 --- IDEAglobal --- -1.4% 55.0 --- IHS Global Insight --- --- 52.0 --- Informa Global Markets --- --- 54.2 --- ING Financial Markets -1.0% -2.1% 55.0 --- Insight Economics --- -1.6% 53.0 --- Intesa-SanPaulo --- --- 53.5 --- J.P. Morgan Chase -0.9% -2.0% 54.5 0.0% Janney Montgomery Scott -1.2% -1.8% 54.0 --- Jefferies & Co. --- --- 55.0 --- Landesbank BW --- -0.8% 53.0 --- Manulife Asset Management --- --- 53.5 0.0% MF Global -0.8% -1.9% 55.5 0.0% Moody’s Analytics --- --- 54.5 --- Morgan Stanley & Co. --- --- 52.5 --- National Bank Financial --- --- 56.0 --- Natixis -0.1% --- 53.5 --- Nord/LB --- --- 53.5 --- Pierian Capital -1.5% -2.1% 54.3 -1.1% Pierpont Securities LLC --- --- 56.0 --- PineBridge Investments -1.0% --- 55.0 0.4% Raymond James --- --- 54.0 --- RBC Capital Markets --- --- 55.3 --- RBS Securities Inc. --- --- 54.5 --- Scotia Capital -1.0% --- 53.5 --- Societe Generale -1.0% -2.1% 57.3 --- Standard Chartered -0.8% -1.3% 55.0 --- State Street Global Markets -0.6% --- 55.2 0.0% Stone & McCarthy Research --- --- 55.0 --- TD Securities -1.0% --- --- --- Thomson Reuters/IFR --- -1.8% 57.0 --- UBS -0.7% -1.8% 55.5 0.5% UniCredit Research --- -1.9% 54.5 --- University of Maryland -0.9% -1.5% 54.2 --- Wells Fargo & Co. --- --- 53.7 --- WestLB AG -0.2% -0.8% 54.0 0.1% Westpac Banking Co. --- --- 53.0 --- Wrightson ICAP -1.2% --- 55.0 --- ============================================================== To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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