GDP REPORT

2nd quarter 2009               - 0.7%

3rd quarter 2009                2.2%

4th quarter 2009                 5.6%

1st quarter 2010                 2.7%

2nd quarter 2010                1.7%

3rd quarter 2010                 2.6%

4th quarter 2010                 3.1%

1st quarter 2011
Advance Estimate April 28            1.8%
Second Estimate May 26
Third Estimate June 24

Release dates in 2011 Gross Domestic Product

                                                2nd QT               3rd QT

Advance Estimate                    July 29                Oct 27
Second Estimate                     Aug 26                Nov 22
Third Estimate                        Sept 29                Dec 22

As housing goes …. So goes the economy!

Land & Lot Prices – Best Time to Buy?

Without a doubt, land and lot pricing does NOT follow the home price decline experienced in most markets over the past several years. However, land and lot values reflect the availability of land suitable for development purposes.

Most developers can’t and will not wait for land to be rezoned regardless if the owner is willing to sell with this contingency. The local political environment will surely influence how communities grow in the future.

In the Baltimore area, lots are in short supply and with demand increasing, lot prices will start to escalate as the home building business continues to forge forward. In contrast, there are over 30,000 finished lots on the market in Charlotte, NC. Granted, many of these lots are in failed or stalled subdivisions which will be purchased by national builders with the intent of constructing smaller price sensitive homes.

In the Baltimore area the lot to home price ratio will be over 35% in many cases and in Charlotte, the ratio will be around 20%. The approach to building will be remarkably different simply due to the supply of land and lots. Builders in the Baltimore area may be seeking a certain dollar amount of profit while the builder in Charlotte will continue to seek a certain percentage profit.

In comparison, a developed lot in Baltimore may be in the range of $150,000 and in Charlotte about $50,000. The under supply of lots and land in the Baltimore-Washington DC area will continue to drive land prices higher; the vicious cycle in reverse. In contrast, the Charlotte market will again lag the national market but the lot supply will be exhausted and prices will again rise.

The bottom line for either market – if you are in the market for a new home, buy now. If you are investigating the purchase of a lot to build your home, buy now.

Japan’s Tsunami

Before and after pictures of one area in Japan destroyed by the tsunami. Did you see the pictures of the damage caused by the tornadoes in the south or the wildfires in Texas?

The U.S. Debt is over $14 trillion

The government now borrows about 42 cents of every dollar it spends


DATE                 Debt Held by the Public             Intragovernmental                         Total Public Debt
                                                                                Holdings

12/31/2008             6,369,318,869,476.54       4,330,485,995,135.59                10,699,804,864,612.13

12/31/2010             9,390,476,088,043.35       4,634,739,130,665.17                14,025,215,218,708.52


(AP) WASHINGTON - China, the biggest buyer of U.S. Treasury securities, owns a lot more than previously estimated.

In an annual revision of the figures, the Treasury Department said Monday that China's holdings totaled $1.16 trillion at the end of December. That was an increase of 30 percent from an estimate the government made two weeks ago.


My comment:
The US Government owes the Social Security Trust Fund about 18% of the total debt, or ………………..

                                                $2,500,000,000,000

President Obama & Housing

Last week, President Obama met a group of Facebook employees for a town hall meeting in Palo Alto, CA. The WSJ reported on the event and I am taking excerpts from their reporting on the Q & A associated with housing.

“Housing is probably the biggest drag on the economy right now”

The housing crisis will not go away:

“Underwater borrowers aren’t spending much because they’ve lost wealth and job mobility is hindered because people can’t easily sell their homes and move”

“It would be hard for some buyers today because credit had become too easy during the bubble, when many investors took advantage of easy money and rising prices to flip homes for a quick profit.” “We’ve got to strike a balance”

“And what…I’m really concerned about is making sure that the housing market overall recovers enough that it’s not such a huge drag on the economy, because if it isn’t then people will have more confidence, they’ll spend more, more people will get hired, and overall the economy will improve.”

“But I recognize for a lot of folks who want to be first-time homebuyers it’s still tough out there. It’s getting better, in certain area, but in some places, particularly where there was a big housing bubble, it’s not.”

As you all know by now, I am a strong proponent that:      As housing goes…..So goes the economy.
You be the judge on whether his responses provide the proper focus on housing and job creation. I am disappointed that there isn’t a national policy on how to turn the industry around. Declining values doesn’t bother me. After all, if families purchase a home to become part of a community, the values will return. The problem is jobs. People are still losing their jobs and this will cause stress in paying mortgages which could lead to foreclosures and then house values declining again --- we need to stop the vicious cycle.

The M and M’s of Success

Guest Blog Post By Pat Riley

Winning in life, sports and business all require that you have the proper mindset. In most cases, this is a personality trait that we are born with but, like many behaviors, it is also one that can be enhanced by what we read, what we watch and who we surround ourselves with. A good attitude is at the root of every successful person you know or aspire to emulate.

You often hear people say about others, “they are always so positive and upbeat.” The remark comes out almost with a jealous undertone. Despite the potential jealousy, people will always look to surround themselves with positive people. Do we as human beings relish spending time with negative people that are always subconsciously trying to drag us down to their level of unhappiness? Hopefully your answer is no.

We move towards positivity because we hope that that mindset will rub off on us. That is why success comes to people with a great mindset because people gravitate towards them and their leadership mindset.

Tomorrow, take a drive around the block and get you head right. Being in the right frame of mind will help bring success to you. Read good things and only watch and tune into those things that can inspire. Our minds need a steady diet of good input as well as our bodies.

Peak of the Week

A look back and a peek forward ---

                                                                                           What is next...................................?

Financial Reasons to Buy

#3 Qualifying for a Mortgage will be more Difficult

Here are proposed changes to the requirements for a ‘qualified residential mortgage’:

• Certain mortgage types would be eliminated
• You would need to put a minimum of 20% down
• You would need a minimum 690 FICO score
• The ratios of income to both the mortgage payment and overall debt would become much more conservative (28% and 36%)

There would be loans available to purchasers who don’t qualify under the new rules. However, they will probably be more expensive to the buyer by a higher interest rate and higher closing costs.

#4 Rents Are Expected to Increase

The supply of available rentals is decreasing and the demand is increasing. That will lead to an increase in rental costs throughout the year. The Wall Street Journal this week quoted a report by Reis, Inc:

“Expect vacancies to continue declining, and rents rising through the rest of 2011 at an even faster pace.”

You may be waiting on the sidelines to see if prices will continue to depreciate before you purchase a home. Consider the monthly cost if you purchased today instead of waiting and interest rates increase. With today’s prices, your mortgage payment will be less than the rent for a smaller unit.

Financial Reasons to Buy Now

Besides personal reasons for buying a home, there are several financial reasons why you should consider buying a home NOW rather than waiting for a better time.

#1 Interest Rates Are Increasing
Interest rates have increased almost 3/4 of a point in the last six months. Most experts expect rates to continue to increase through the year. Interest rates along with price determine the overall cost of a home. Even with prices softening, if interest rates rise, it may be less expensive to buy now rather than wait.


#2 The 30-Year Mortgage May Disappear
There has been much debate regarding government’s role in providing support for homeownership. There are several experts who believe If Fannie Mae and Freddie Mac’s roles are eliminated, or even limited, it may be the end to the 30-year mortgage. This concern is addressed in MSN Real Estate’s Is it curtains for the 30-year mortgage?

Reproduced with the permission of Mortgage-X.com

Direct link: http://www.mortgage-x.com/

Online Videos & Viral Videos

• Online video is the only advertising medium with a growth rate 60%. If you are in print media, you are wasting your money. Except, the local community newspaper seems to be thriving. This should tell you something.

• Online video viewing is increasing across all demographics. How many videos do you watch in a day?

• Online videos have a high rate of return because of minimal production and distribution costs.

• Online videos have preferential treatment in searching due to the thumbnail. A video will have a higher search result than a text post.

• Online video is the most interactive form of social media. Do you remember the video or an ad or a blog post?

Ideas on producing your next video:
• Can you stir up emotion?
• Keep the video short
• Cause the viewer to want to forward the video to someone else
• “Friday at noon is the best time to blast a video”

Viral Videos:
• Viral videos are low production cost and high-volume traffic videos
• Viral videos are not location site specific
• Create a video for the bored at work crowd that they will want to pass around.
• A viral video is free with a bigger
• A viral video is not about the quality of an idea but how much effort to pass it around

Ideas for your Own Blog

If you have decided to start your own blog, I have provided a list of ideas (source unknown and modified) that may assist you prepare. I have decided to focus on real estate, housing, the economy, and other issues of interest. I hope this list provides a few good ideas for you to consider and pursue. Remember consistency in posting to your blog.

1. Social media

2. Tips and tactics

3. Product reviews

4. New product introductions

5. Questions from other customers

6. Updates on products, services, and your business

7. Surveys and survey follow ups

8. Industry news

9. Your newest customers and current projects

10. Contests

11. Discounts

12. Coupons

13. Special offers

14. Articles

15. Sales

16. Customer testimonials

17. Tutorials

18. Changes in business that affect customers

19. New applications for existing products/services

20. Statistics

21. Links to relevant sites

22. Family and friends

23. Technological change for the general public

24. LinkedIn and pursuit of professional networking

25. Sports

26. Term Limits!

Peak of the Week

Other Stats - See full article from DailyFinance: http://srph.it/hjlkIY

• Hedge fund managers: $883 million average annual income.
• Corporations: Up 12% to record highs
• Owners of commodities: Significant increase. This is great news for those who own commodities and bad news for people who have to pay for them.
• Median family income: Down 8.1% in the last decade. And with 13.5 million people out of work, the pressure to push wages lower remains strong.
• Stock market investors: Down 8%. Since the first week of April 2007, the S&P 500 is down 8%. But since Obama took office, stocks have increased an average of 26.5% a year.
• Homeowners: Values are down 30%.
• Wall Street: Average cash bonus is down 37% to $128,530!

 I would like to add a few stats:

Do you know who Vernon Wells is and what he does for a living?  He earns $26,187,500 per year.

The Average Baseball player salary in 2000 $1,980,000
                                                      in 2010 $3,270,000

Average of 6.5% salary increase per year which I am sure they deserve the increases because their performance has been terrific! The NFL and the NBA both face labor problems this coming year and lockouts may happen this coming season.
This is what I do know.

Gas is currently at $3.71/gal in north Charlotte.

Today, as a sole proprietor, I could not get a mortgage. The tightening of lending has all but shut off the fuel for small businesses. And, the SBA – no chance!

The unemployment picture is worse than what is reported. More and more people are coming off of extended benefits. And, sole proprietors are not included in the statistics.

What is your salary this year? Are you really better off this year since the “Great Depression” of 2008?

Peek forward - Time for a change in our political arena – start with term limits. This next election cycle is our time to make a difference.

2011 Prices Increases

Food, clothing, and other commodity prices will continue to increase this year because inflation is now among us. Inflation has always been a Fed benchmark to manage with the adjustment of interest rates. Since their interest rate tricks are all but exhausted, we may only be able to watch as prices increase this year and beyond. There are two areas which you may want to watch:

Rent

Home prices will stabilize but rents will start to rise due to homebuyers not buying and multifamily housing production has been at an all time low. Local communities have not changed their zoning ordinances to increase densities. Multifamily zoned land will be at a premium.

College

States are pulling their funding to universities. The college-age population continues to increase and curtailing funding will result in higher tuition, larger class sizes, and fewer elective classes. Thus, the cost to achieve a college degree will increase substantially.

Electricity Use in a Home

Source: 2009 Building Energy Data Book, U.S. Department of Energy, Table 21.5. Represents an all-electric home, updated February 2011.

39.4% Space Heating and cooling

12.5% Water Heating

11.6% Lighting **   

9.3% All other uses

8.1% Electronics

7.2% Refrigeration

6.2% Washer, Dryer, Dishwasher

4.7% Cooking

1.0% Computers

** NOTE: The Energy Independence and Security Act of 2007, in effect January 1, 2012.


The Act includes provisions requiring light bulbs to use 30 percent less energy by 2014. The energy efficient standards are being phased in over a three-year period. As of January 1, 2012, the standards would effectively phase out the use of traditional incandescent bulbs.

100-watt bulbs in 2012

75-watt bulbs in 2013

60- and 40-watt bulbs in 2014

Traditional incandescent light bulbs will be replaced with halogen, compact fluorescent bulbs (CFL) - contains mercury or light-emitting diode (LED) bulbs.

It used to be “Father Knows Best” – now it is the “Federal Government Knows Best”

If your electric bill was $100 and using the above data, approximately $12 is attributed to lighting. With the new light bulb standards, how much will you save and how long will it take you to “pay back’ the increased initial cost of the light bulb.

This gives me a headache or is it the light?

Survey Says….NC Ranks High in the 2010 Census Results

The 2010 Census Results showed North Carolina grew at a healthy pace over the past decade. North Carolina continues to be a hot-spot for relocation. The quality of life, the great weather, the friendly people, the housing affordability, and the accessibility to both the mountains and the coast in one state makes it a one-of-a-kind destination!!

The Top 5 Cities in North Carolina from the year 2000 to the year 2010:

• Charlotte grew 190,596 new residents to a total of 731,424 residents = a 35.2% increase

• Raleigh grew 127,799 new residents to a total of 403,892 residents = a 46.3% increase

• Greensboro grew 45,775 new residents to a total of 269,666 residents = a 20.4% increase

• Winston-Salem grew 43,841 new residents to a total of 229,617 residents = a 23.6% increase

• Durham grew 41,295 new residents to a total of 228,330 residents = a 22.1% increase

The past decade saw Charlotte boom with the banking sector; Raleigh with the technology sector; and the Triad Region re-inventing itself with aviation, logistics, and new lines of manufacturing.

This decade looks bright for North Carolina. The above data shows that people across the country want to move here AND are moving here!

Peak of the Week

Technology is changing every day and our ability to select which forum to use and how to use it decreases proportionally as technical advances increase! In previous blog posts, I have illustrated the changes in technology but changes are rapid and mobile trends will rule the immediate future – peek ahead.

Social Networking
Facebook                     660,000,000 users                        41% INCREASE yr over yr

Internet Search
Google                         972,000,000 users                           8% INCREASES yr over yr

Mobile
iPhone, iPad                 130,000,000 users                         103% INCREASE yr over yr

Information Distribution
Twitter                         253,000,000 users                           85% INCREASE yr over yr

eCommerce
Groupon                        51,000,000 subscribers                   25x INCREASE yr over yr



Target Marketing Efficiency

Mobile                 90%
Internet                50%
TV                      20%
Print                  <10%
Radio                <10%
Outdoor            <5%

In the past, I have been accused of waiting for technology to be proven before buying. Now, do we have that luxury or will technology pass us by?

I say – ride the technological wave!

Best and Worst States for Retirement

Retirements.com provided the following lists using climate, taxation and the state’s financial health as criteria:

Ten WORST states for retirement:
50. Illinois
49. California
48. New York
47. Rhode Island
46. New Jersey
45. Ohio
44. Wisconsin
43. Massachusetts
42. Connecticut
41. Nevada

TopRetirements.com - Top Ten BEST States for retirement:

1. Florida
2. North Carolina
3. Tennessee
4. South Carolina
5. California
6. Arizona
7. Texas
8. Colorado
9. Oregon
10. Delaware

MoneyRates.com's study used the following criteria in preparing their list of states for retirement:

• Cost of living
• Unemployment
• Tax burden
• Climate
• Crime rates
• Life expectancy

TopRetirements.com also considered the following criteria but was not used in the above ratings:

• Health care
• Recreational opportunities
• Transportation
• Cultural resources
• Natural disasters
• Social, political or religious concerns

My previous blog posts on the trends of the 55+ market included being close to family. This may be the overriding factor for baby boomers in selecting their retirement haven!

BUILDER Magazine’s Healthiest Housing Markets for 2011

20. Boston 62.6
19. Omaha 62.8
18. Boise 63.0
17. Richmond 64.2
16. Wilmington, NC 65.0
15. El Paso 65.8
14. Nashville 67.2
13. Birmingham 70.1
12. Dallas 70.7
11. Washington DC 74.8
10. San Antonio 75.6
9. Naples, Fl 75.8
8. Charlotte, NC 76.6                  median price in 2007    $204,000     and in        2010     $190,000
7. Houston 77.3
6. Minneapolis 77.6
5. Biloxi 78.1
4. Huntsville, Al 80.3
3. Durham, NC 81.5
2. Austin, Tx 86.5
1. Raleigh, NC 86.9

North Carolina has three cities in the top ten healthiest housing markets for 2011. I will keep you posted on the results. as they say, "only time will tell".
If you did not see 60 Minutes last night on the mortgage crisis, please find a rerun or an article about their findings. This will put you over the edge. More later.

Housing Trends Update for the 55+ Market: Summary 2

The following summary is from the 55+ market report findings prepared by the MetLife Mature Market Institute and the National Association of Home Builders.

During the “Great Recession”, the average income for 55+ households dropped from an average of $36,000 in 2007 to $34,000 in 2009.

In 2009, more than 27% of age-qualified active adults earned $100,000 or more compared to less than 5% in 2001.

The median price of a new home designed for the 55+ market segment was $300,000 in 2009. The median price of an age-restricted community home in 2005 was $320,000.

When 55+ households buy new homes, their homes are upgraded in features but in price.
Less than 1% of the 55+ households reported having a reverse mortgage.
67% of those taking advantage of a reverse mortgage were between 62-79 yrs. old.

2011 new housing starts for 55+ communities approximately 54,000

2012 new housing starts for 55+ communities approximately 79,000