The turn-around in home prices seen in the Spring and Summer has faded with only seven of the 20 cities seeing month-to-month gains, although all 20 continue to show improvements on a year-over-year basis. All in all, this report should be described as flat. Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip. Before jumping to conclusions, recognize that the one time that happened at the beginning of the 1980s, Fed policy saw dramatic reversals, which is very different from the stable and consistent Fed policy we have today. Further, sales of existing homes – those included in the S&P/Case-Shiller Home Price Indices – have been very strong in recent months, working off the inventories of houses for sale. At the same time, housing starts remain weak, fears that the market will be swamped by a wave of foreclosures are heard and government programs aimed at the housing market will expire in the first half of 2010.

David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s

The worst investment will be U.S. Treasuries and cash, which has no return at present. That money will shift into other assets, and this is the one reason that I am moderately positive about equities.

Marc Faber

We’ve started to see the possibility of either a leveling off of prices for a few months or perhaps a double-dip.

Maureen Maitland, the vice president for index services at S.& P

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