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From the L.A. Times:

Karl E. Case, a professor at Wellesley College and co-creator of the index, said the improvements were a sign that the economic recovery was beginning to help consumers gain confidence.

“What people are seeing in the stock market, and what people are feeling, is the beginning of a real recovery,” Case said. “Now that the economy is starting to come back, I think the psychology has changed.”

But David M. Blitzer, chairman of the Index Committee at Standard & Poor’s, characterized the report as “mixed,” with 12 cities posting increases on a seasonally adjusted basis. When left unadjusted for seasonal variations, the 20-city index fell 0.4%.  Economists surveyed by Bloomberg had expected the index to fall in January.

Richard Green, director of the USC Lusk Center for Real Estate, said Southern California is showing gains because it was one of the earliest markets to get hit and is rebounding before other areas.

“We fell first, we fell deeply and we didn’t overbuild the way other parts of the country did,” he said. “And if you look at the long-term horizon, the amount of housing built relative to population was less than other places, and it is still really hard to build new houses here.”

That means the chances of recovering sooner are good, he said.

Others were not as optimistic.

“If you look at the last two big real estate bubbles in the late 80s and 70s, you didn’t see the market rebound for five years,” said Christopher Thornberg, principal of Beacon Economics. “It’s amazing to me that people can look at a rebounding market after the largest bubble ever and possibly think this could be sustainable.”

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Click here for interview with Robert Shiller – he says the chances of a double-dip are about 50/50.

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