Home prices rise in February
Home prices made nice gains in February, according to the widely watched S&P/Case-Shiller Home Price Indices, with all 20 cities tracked showing year-over-year improvement.
Data through February 2013, released today, show average home prices increased 8.6% and 9.3% for the 10- and 20-City Composites in the 12 months ending in February 2013.
The 10- and 20-City Composites rose 0.4% and 0.3% from January to February.
All 20 cities covered by the indices posted year-over-year increases for at least two consecutive months. In 16 of the 20 cities annual growth rates rose from the last month; Detroit, Miami, Minneapolis and Phoenix saw slight annual deceleration ranging from -0.1 to -0.4 percentage points. Phoenix continued to stand out with an impressive year-over-year return of +23.0%.
“Home prices continue to show solid increases across all 20 cities,” said David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “The 10- and 20-City Composites recorded their highest annual growth rates since May 2006; seasonally adjusted monthly data show all 20 cities saw higher prices for two months in a row — the last time that happened was in early 2005."
Even though eight MSAs posted monthly declines, all 20 cities showed increases when compared with their February 2012 levels. Atlanta, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, Phoenix, San Diego, San Francisco and Tampa were the 10 MSAs that continued to report double-digit year-over-year gains. San Diego and Tampa recorded their first months of double-digit annual increases of just over 10.0%.
Atlanta, up 16.5%, and Dallas, up 7.1%, had the highest annual growth rates in the history of these indices since 1992 and 2001, respectively.
Masco posts first-quarter growth
Taylor, Mich.-based Masco Corp. reported first-quarter net sales of $1.88 billion, up 3.9% from the same quarter last year.
Net income for the giant manufacturer of home improvement and building products was $47 million, up from $33 million in the prior-year quarter.
"We continued to benefit from strong growth in North American new home construction," said Masco president and CEO Tim Wadhams. "Despite a harsher winter this year in regions of North America and Europe, we improved our performance in the first quarter compared with 2012."
Wadhams pointed to successful new products and programs while describing the cabinet segment as "heading in the right direction."
Reducing costs also played a role in the company’s strong performance, he said.
"We continue to believe that new home construction will show strong growth in 2013, and repair and remodel activity will grow modestly, with big ticket items continuing to lag. While the continued weakness in the Eurozone remains a concern, we believe our ability to leverage the growth in new home construction, along with the actions we have taken over the past several years, including investing in our brands, reducing our cost structure and paying down debt, will continue to strengthen our business for the future," said Wadhams.
Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for April 26, 2013
*Western – regional species perimeter foundation; Southern – regional species slab construction.
Crow’s Market Recap — A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow’s Weekly Market Report.
Lumber: SPF lumber prices continued to drop, in many instances by double digits, as producers across Canada tried to find price levels that would draw more interest from buyers. Producers reported improved demand at the lower price levels. Southern Pine lumber producers sold prompt shipping volumes in some instances at discounts of $30 to $40 in an effort to control growing floor stocks of particular items. Where selling floor stocks was not as pressing, mills discounted less, willing to stack more lumber until prices rebound. Coastal species lumber mills became more aggressive in their approach, forcing market prices down in bigger chunks. The need to sell production varied, generating a broad range of mill quotes and selling levels. Price concessions and prompt shipments were the keys to successful sales for Inland species lumber. Even so, sales volumes remained light, as buyers remained on the sidelines. Light sales of Radiata Pine Mldg&Btr continued, as asking prices put it out of buyers’ reach in many cases. Sales of Ponderosa Pine Moulding and Shop lumber remained active, in spite of little participation from window plants. Limited supplies of Shop grades added to the market’s strength. Sales activity for Ponderosa Pine boards was quiet. Buyers remained on the sidelines, especially when it came to #2. Eastern White Pine producers reported steady demand and sales for Industrial. Select sales remained slow. Activity for ESLP was quiet as buyers remained on the sidelines. Western Red Cedar producers continued to sell moderate volumes at a steady pace, leaving prices very firm or edging higher. Producers catering to home center outlets generally reported better sales to those stores than to wholesalers and retailers.
Panels: OSB prices often changed several times in a day, as both producers and buyers searched for a trading level. The late arrival of spring was blamed for the market weakness, along with limited available credit and increased production. Slow trading left the Southern Pine plywood market quieter than it has been in weeks. Mill order files extending out into the middle of May allowed producers to hold prices while wholesalers discounted. Western Fir plywood mills aggressively lowered prices and accepted counters to move order files beyond a certain point. Buyers willing to purchase significant volumes took advantage of CDX items at levels discounted $30 to $40. After a quiet start, Canadian plywood buyers came to producers with offers that fit mills’ needs. The sales allowed producers to extend their order files into the middle of May and hold a better line on discounts. Western particleboard producers continued to experience varying degrees of improvement in their market. MDF sales in both the East and West remained strong.
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