So there is good news and bad news...
Jobless claims declined for the second straight week. Unemployment benefits for the week dropped 29,000 to 409,000. This beat the median estimates which were calling for the benefits to drop to 420,000. This further points to the fact that April's surge might have been more of a result of temporary events and not a sign of a deeper erosion in the job market.
Now for the not so good news. Although, if you read my blog you will not be surprised by this data.
Here is the latest data:
WASHINGTON (MarketWatch) - Sales of existing single-family homes and condos fell 0.8% in April to a seasonally adjusted annual rate of 5.05 million, the National Association of Realtors reported Thursday. The decline was a surprise. Economists surveyed by MarketWatch expected sales to rise to 5.25 million units in April, based on a surge in pending home sales in March. Sales rose a revised 3.5% in March to 5.09 million units, down from the initial estimate of a 3.7% rise to 5.1 million units. The median price of homes sold was down 5% in April from last year at $163,700. Inventories of existing homes for sale rose 9.9% to 3.87 million units in April, representing 9.2 months' supply, up from 8.3 months in March
Keep in mind that this is national data and not specific to our area.
Thursday, May 19, 2011
Friday, May 13, 2011
Numbers don't lie....do they?
Last month seemed to me to be the slowest month in real estate since I started in 2003. Oddly enough, it wasn't for the lack of business. We had a few listings and a handful of buyers keeping us busy. However, it just seemed like we were working in a vacuum. Open Houses had very few visits, the inventory for my buyer's needs was lacking, and despite all the "all cash" offers that went through one of our properties they never pulled the trigger. I talked to a few other agents that expressed the same somber conclusion about the month of April. So I decided to look at some statistics and see if numbers backed up the ghost town feeling. Here are the sales statistics for Huntington Beach in 30 day increments.
Last 30 days..............157 sold
Prior 30 days.............143 sold
Prior 30 days.............107 sold
Prior 30 days.............102 sold
To put it in perspective the same dates in 2010 yielded 95, 99, 110, and 184 sales respectively. So although more houses have sold this year than last YTD, the april-May numbers are still concerning. Historically the first three months of the year are a horrible time to buy or sell. I often refer to it as our ill timed summer vacation. However, last year is more indicative of the surge in sales that ususally starts to take place as the ground dries up and people start leaving their houses again. Who am I kidding, in Huntington we just don't go outside because it is an uncomfortable 67 degrees and not in the 70-80 range where we don't feel lethargic. Anyway, this year we are about 15% off our abismal sales from last year! I will monitor this and post again in a month or so to see if this is just a slump or a sign of what is to come.
Last 30 days..............157 sold
Prior 30 days.............143 sold
Prior 30 days.............107 sold
Prior 30 days.............102 sold
To put it in perspective the same dates in 2010 yielded 95, 99, 110, and 184 sales respectively. So although more houses have sold this year than last YTD, the april-May numbers are still concerning. Historically the first three months of the year are a horrible time to buy or sell. I often refer to it as our ill timed summer vacation. However, last year is more indicative of the surge in sales that ususally starts to take place as the ground dries up and people start leaving their houses again. Who am I kidding, in Huntington we just don't go outside because it is an uncomfortable 67 degrees and not in the 70-80 range where we don't feel lethargic. Anyway, this year we are about 15% off our abismal sales from last year! I will monitor this and post again in a month or so to see if this is just a slump or a sign of what is to come.
Tuesday, February 8, 2011
Inflation....it's like watching an old horror film
We all know it is there lurking around the corner waiting for our young attractive vulnerable actors/actresses....aka country. We all know it is going to be a huge problem in the future. (hence the obscene gains in gold and gold producers over the last year +.) However, we live in a see no evil hear no evil time similar to our scantily clad soon to be victims in the metaphor above.
After all, don't we hear enough doom and gloom with the earnings projections, Greece and Spain's debt woes, and let us not leave out the latest rendering of the classic tune "protest like an Egyptian". With all this going on it is nice to hear manufacturing is improving, production seems to be picking up some steam, and the unemployment rate is falling.(disclaimer: If I remember correctly we added 36K private sector jobs last month, the fact that the unemployment percentage in this country dropped from the 9.4% to 9% between Dec. and Jan. simply tells me that people stopped looking and gave up. How do you add 36K net jobs in the private sector and have that significant of a drop in the unemployment rate without doubling our military personnel or some sort of U.S. genocide that took potential workers off the table.)
I digress from my point....today China raised its rate .25% for the 3rd time since October to combat inflation. As a result, our treasury auction was a disaster as the faux pas "i" word worked its way through the market and investors began anticipating the same thing eventually happening in the US. Now we haven't had nearly the growth that China has seen over the last few years so this isn't an apples to apples comparison. However, it should be noted that our rates rising does numerous things. First, as I said in my last blog, it prices people out of the fragile housing market if it is not a gradual increase. Second, Adjustable rate mortgages that people are treading water with because their house is underwater will now be on the rise. Also, all that debt that the treasury is selling off on a weekly basis to fund QE2....well I think it goes without saying that the higher the yield the more interest the US is going to have to pay back to borrow that money. (I guess it didn't go without saying). Finally, remember all that money that the banks are lending because they are getting it so cheap.....(insert sarcastic grin).....imagine what how brutal lending is going to be when the lending window isn't just throwing money to the banks.
So now that you are panicking wondering what do I do? Here is some free advice: (disclaimer: you get what you pay for)
1. Pick your investments wisely as you will be fighting inflation. I personally would not be bullish on US Treasury Bonds.
2. For the love of all that is good in this world get a fixed rate mortgage. Rates are on the rise but they are still ridiculously low and inflation will cause higher rents....(light bulb) a rental property with a loan at 4.875% when rates jump to 6% and rents increase is going to look pretty swanky.
3. There was always one day a month that my dad would do all the bills and I knew that was not a day to cross, question, or annoy my dad...because it was crunch time to budget and/or make cuts. Let's just say that 'ol lady liberty is going to be having "bill day" for a couple years coming up. We dug ourselves in a giant hole and surprise, surprise, throwing money at it hasn't decreased the pile of money we owe. Be patient....
4. The price of Vodka is going to increase....get those martinis flowing
Until next time....
After all, don't we hear enough doom and gloom with the earnings projections, Greece and Spain's debt woes, and let us not leave out the latest rendering of the classic tune "protest like an Egyptian". With all this going on it is nice to hear manufacturing is improving, production seems to be picking up some steam, and the unemployment rate is falling.(disclaimer: If I remember correctly we added 36K private sector jobs last month, the fact that the unemployment percentage in this country dropped from the 9.4% to 9% between Dec. and Jan. simply tells me that people stopped looking and gave up. How do you add 36K net jobs in the private sector and have that significant of a drop in the unemployment rate without doubling our military personnel or some sort of U.S. genocide that took potential workers off the table.)
I digress from my point....today China raised its rate .25% for the 3rd time since October to combat inflation. As a result, our treasury auction was a disaster as the faux pas "i" word worked its way through the market and investors began anticipating the same thing eventually happening in the US. Now we haven't had nearly the growth that China has seen over the last few years so this isn't an apples to apples comparison. However, it should be noted that our rates rising does numerous things. First, as I said in my last blog, it prices people out of the fragile housing market if it is not a gradual increase. Second, Adjustable rate mortgages that people are treading water with because their house is underwater will now be on the rise. Also, all that debt that the treasury is selling off on a weekly basis to fund QE2....well I think it goes without saying that the higher the yield the more interest the US is going to have to pay back to borrow that money. (I guess it didn't go without saying). Finally, remember all that money that the banks are lending because they are getting it so cheap.....(insert sarcastic grin).....imagine what how brutal lending is going to be when the lending window isn't just throwing money to the banks.
So now that you are panicking wondering what do I do? Here is some free advice: (disclaimer: you get what you pay for)
1. Pick your investments wisely as you will be fighting inflation. I personally would not be bullish on US Treasury Bonds.
2. For the love of all that is good in this world get a fixed rate mortgage. Rates are on the rise but they are still ridiculously low and inflation will cause higher rents....(light bulb) a rental property with a loan at 4.875% when rates jump to 6% and rents increase is going to look pretty swanky.
3. There was always one day a month that my dad would do all the bills and I knew that was not a day to cross, question, or annoy my dad...because it was crunch time to budget and/or make cuts. Let's just say that 'ol lady liberty is going to be having "bill day" for a couple years coming up. We dug ourselves in a giant hole and surprise, surprise, throwing money at it hasn't decreased the pile of money we owe. Be patient....
4. The price of Vodka is going to increase....get those martinis flowing
Until next time....
Friday, January 21, 2011
Numbers tell the tale
As unfathomable as it seems the housing market is slowly validating the minority of people who claim we are experiencing a recovery. According to CAR....California home sales rose in December, posting their highest level since May.
"December's sales increase reflects buyers taking advantage of rock bottom interest rates and improved affordability since the first half of the year, when prices were higher," said C.A.R. President Beth L. Peerce. "December's sales opened escrow in October and November. Rates hit their absolute lowest in October but began edging higher in November, prompting buyers to get off the fence,"
However, with yesterday's horrific auction of TIPS, investors appear to have given up on the idea that inflation is going to play a significant role in monetary policy. This is also evidenced in the fact that rates have been trending higher into the new year. The problem with that is a small rate jump will get people off the fence as the CAR President said. However, a more than gradual rise in rates consistently throughout the year might just push people off the fence as their affordability dwindles.
Here is summation of the rest of the report:
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 520,680 in December. December's sales were up 5.9 percent from November's revised pace of 491,590 but were down 6.8 percent from the revised 558,840 sales pace recorded in December 2009. The statewide sales figure represents what would be the total number of homes sold during 2010 if sales maintained the November pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
Following three consecutive monthly declines, the median price of an existing, single-family detached home sold in California increased 1.7 percent from a revised $296,690 in November but was down 1.6 percent from the revised $306,860 median price recorded for the same period a year ago.
"While sales rose in December, the sales pace in the second half of the year was lower than the first half as the housing market weaned itself off home buyer tax credits," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "For 2010 as a whole, sales reached 494,900 homes sold, down 9.5 percent from the 546,860 homes sold in 2009. However, the statewide median price increased 10.2 percent to reach $302,900 for the year, up from the $275,000 recorded in 2009," she said.
A greater than usual drop in listings combined with the sales increase caused C.A.R.'s Unsold Inventory Index to decline more than one month. The Unsold Inventory Index for existing, single-family detached homes was 5.0 months in December, down from 6.2 months in November. The index was 3.8 months in December 2009. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate. The median number of days it took to sell a single-family home was 57.5 days in December 2010, compared with 35.1 days for the same period a year ago.
Source: BusinessWire
"December's sales increase reflects buyers taking advantage of rock bottom interest rates and improved affordability since the first half of the year, when prices were higher," said C.A.R. President Beth L. Peerce. "December's sales opened escrow in October and November. Rates hit their absolute lowest in October but began edging higher in November, prompting buyers to get off the fence,"
However, with yesterday's horrific auction of TIPS, investors appear to have given up on the idea that inflation is going to play a significant role in monetary policy. This is also evidenced in the fact that rates have been trending higher into the new year. The problem with that is a small rate jump will get people off the fence as the CAR President said. However, a more than gradual rise in rates consistently throughout the year might just push people off the fence as their affordability dwindles.
Here is summation of the rest of the report:
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 520,680 in December. December's sales were up 5.9 percent from November's revised pace of 491,590 but were down 6.8 percent from the revised 558,840 sales pace recorded in December 2009. The statewide sales figure represents what would be the total number of homes sold during 2010 if sales maintained the November pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
Following three consecutive monthly declines, the median price of an existing, single-family detached home sold in California increased 1.7 percent from a revised $296,690 in November but was down 1.6 percent from the revised $306,860 median price recorded for the same period a year ago.
"While sales rose in December, the sales pace in the second half of the year was lower than the first half as the housing market weaned itself off home buyer tax credits," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "For 2010 as a whole, sales reached 494,900 homes sold, down 9.5 percent from the 546,860 homes sold in 2009. However, the statewide median price increased 10.2 percent to reach $302,900 for the year, up from the $275,000 recorded in 2009," she said.
A greater than usual drop in listings combined with the sales increase caused C.A.R.'s Unsold Inventory Index to decline more than one month. The Unsold Inventory Index for existing, single-family detached homes was 5.0 months in December, down from 6.2 months in November. The index was 3.8 months in December 2009. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate. The median number of days it took to sell a single-family home was 57.5 days in December 2010, compared with 35.1 days for the same period a year ago.
Source: BusinessWire
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