Setting The Stage

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Th e M Rep o RT | 53 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t local edition leading indicators Point to Warm- Weather recovery The ConferenCe Board's laTesT numBers may vindiCaTe Those who Blamed winTer weaTher for The year's slow sTarT. NEW YORK // Leading economic indicators for the United States experienced a jump in February, lending credence to arguments that sluggishness earlier in the winter was largely due to weather. The Conference Board reported its Leading Economic Index (LEI) increased 0.5 percent in February to 99.8, inclining steeper after a 0.1 percent gain in January. "The U.S. LEI increased sharply in February, suggesting that any weather-related volatil- ity will be short lived and the economy should continue to im- prove into the second half of the year," said Ataman Ozyildirim, economist at the Conference Board. According to Ozyildirim, the strengths and weaknesses in the LEI were mostly balanced against each other in February, "with large increases in hous- ing permits and the interest rate spread more than offsetting decreases in the workweek in manufacturing, consumer expec- tations, and rising initial claims for unemployment insurance." The group also reported improvements in the Coincident Economic Index (CEI)—a mea- sure of current conditions—to 108.2 and the Lagging Economic Index (LAG)—a measure of indicators that follow major eco- nomic changes—to 122.1, though those improvements were minor compared to headline index. "While the CEI shows the pace of economic activ- ity remained slow at the start of 2014, the trend in the LEI remains quite positive," said Ken Goldstein, another economist for the Conference Board. "The biggest challenge continues to be weak consumer demand, pinned down by weak wage growth. "These conditions were still in evidence the first two months of the year, but will likely improve as spring arrives." Buyer/seller Balance a matter of east vs. West sellers have The home field advanTage in The wesT, while Buyers are BeTTer off looking easT. WASHINGTON // Whether buyers or sellers have the upper hand in home sales negotiations this spring will depend on which part of the country their deal takes place, according to Zillow's latest market analysis report. A look at buyers' and sell- ers' markets around the country shows that the better job market in the West is drawing more buy- ers and driving up competition for homes in more economically stable cities, thus giving sellers the upper hand in home sales negotiations in western metro areas. Meanwhile, leverage for buyers is strongest in cities in the East and Midwest, where less competition for homes will likely give them more room for bargaining on prices. According to Zillow, the best market for buyers is Cleveland, followed by Philadelphia, Tampa, Chicago, and Pittsburgh. Buyers should also have the upper hand in Cincinnati, New York City, Detroit, Baltimore, and St. Louis. One notable East Coast excep- tion to the buyers' market is Washington, D.C., which came in eighth on Zillow's list of cities in which sellers have the upper hand in home sales. The most seller-friendly markets this spring, according to the report, will be in the West— particularly along the West Coast—where robust demand, a sense of urgency among buyers, and limited supply are causing rapid home value appreciation, said Zillow's chief economist, Stan Humphries. "In the East, housing markets are appreciating a bit more slowly, and homes are staying on the market longer, which helps give buyers the up- per hand," he said. San Jose and San Francisco lead the top sellers' markets, followed by San Antonio, Los Angeles, Seattle, and Riverside, California. Denver, D.C., Sacramento, and Dallas-Fort Worth round out the top 10 sell- ers' markets. The schism in leverage, ac- cording to Humphries, may actually be a good sign of overall economic recovery nationwide. "As we put the housing reces- sion further in the rearview mir- ror," he said, "the broad-based dynamics that applied during those days, when all markets were reacting similarly to na- tionwide economic conditions, are fading." Zillow's data on median home sales bear out Humphries' optimism. The number of homes listed for sale on was up 5.5 percent in February, and the firm's Home Value Index that month was up 5.6 percent from the previous February. Meanwhile, Zillow expects home values to rise another 3 percent through next February. "Real estate has always been local," Humphries said. "And as the spring market gains momen- tum, this old adage will only become more pronounced." ANALYTICS "Real estate has always been local. And as the spring market gains momentum, this old adage will only become more pronounced." — Stan Humphries, Zillow

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