GDP from 2000 to 3rd Qt 2011

 If the desired pace is around 4%, the years following the recessionary dip of 2001were not spectacular in terms of growth. In fact, the pace of the economy was dismal. NOTE: the second estimate for 3rd QT GDP was lowered to 2.0% and at the end of this month, the GDP growth rate will be released.

The following graph illustrates the single family housing starts. As you know, in my little world, I think that AS Housing Goes..... SO Goes the Economy.  As the economy was below the desired pace, single family housing starts continued to increase from 2001and starts were well above the number of starts needed to satisfy the "normal" housing market.

The single family housing starts took a nose dive in 2006. Two years before the recession officially started. The NAHB forecast in 2012 will be pushed back to 2013 or 2014. Then, the gloves come off. You will see dramatic price increases and the market will immediately turn into a sellers market.  WHY?
Pent-up demand and a shortage of housing!!!!!!!!!!!!!!!

Rents are Increasing & the Monthly Cost of Owning A Home are Decreasing

Price versus Cost

Today, the 30-yr mortgage rate is under 4.0%!!!! A home is more than a long term investment. However, if you can save money on a monthly basis, why wouldn't you buy NOW rather than wait?

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                 0.4%

2nd quarter 2011                1.3%

3rd quarter 2011

Advance Estimate               2.5%

Second Estimate                 2.0%

Third Estimate                   Dec 22


Release dates in 2012 Gross Domestic Product

4rd QT 2011
Advance Estimate     1/27/12
Second Estimate       2/29/12
Third Estimate          3/29/12

As housing goes …. So goes the economy!

HAPPY THANKSGIVING

Relocating for a Job?

As the unemployment rate continues to inch down and as more private sector jobs are being created, job seekers may be considering relocating to obtain a new job. Challenger, Gray and Christmas, Inc has been tracking job seeker relocations since 1986 and their Challenger Job Market Index showed the following trends of those finding employment relocated for their new job:

2006      16.5%

2007      14.7%

2008      11.6%

2009      13.3%

2010       7.3%

2011       9.4%

Maybe job seekers are now considering moving to states with below national average unemployment rates. Companies are still mining the local talent pool and not paying for relocations. I would guess that most companies do not even look at a resume with an out of state address.

However, as the local talent pool is exhausted, companies will again expand their recruitment efforts to other states. The problem will be the reluctance of those seeking a job to move because of the price of their home. Companies will have to start to consider the “home” as being the major reason for finding qualified talent.

The other aspect is that companies are seeking less experienced talent with less “baggage” as they hire outside of their local talent pool. The older workforce have the talent, experience, and know-how to immediately help a company but are not being considered because they have a home to sell!

If companies are reluctant to pay for out of area talent, their expansion will slow down and will wait for a better economic climate.

The cycle continues.

As Housing Goes……So Goes the Economy

Existing Home Sales

For the past three years and 2011, the existing homes sales have been well below the trend line. As the population continues to increase and family formations are on-hold due to the economic downturn, there will be a pent-up demand for existing homes.

Everything is timing --- just when will real estate turn around?

Turning around the economy has a lot to do with consumer confidence and their fear. There are some experts predicting the real estate industry will not turn around until 2013 or 2014.

Let’s pray for the best and expect the worst.

As Housing Goes....So Goes the Economy

An Example of a LOCAL Market

The following information is taken from the Carolina Multiple Listing Service, Inc. for only Birkdale. Birkdale is a community of over 1,000 homes and is located approximately 15 miles north of Charlotte, NC. Contrary to the overall Charlotte region and many areas across the country, Birkdale has held its value and price trends are up.

YEAR                 # of                           AVG                          SP/LP                      DOM
                CLOSED HOMES     CLOSED PRICE

2005                  96                          $317,058                         98%                          41

2006                  80                          $351,168                         98%                          32

2007                  75                          $364,545                         98%                          33

2008                  47                          $382,782                         97%                          43

2009                  38                          $314,827                         96%                          76

2010                  40                          $352,746                         96%                          141

Thru 11/18/11    48                          $358,565                         96%                          140

Most real estate experts indicate housing prices are back to 2003 levels. Of course this is a national viewpoint and NOT indicative of local markets. In fact, Birkdale prices are moving back up for a couple of reasons. The community did not see rapid housing appreciation during the housing boom – 3-5% increases. The community is stable and has not experienced many foreclosures or short sales that cause a downward spiral of housing prices.

The other interest fact is the number of days on the market (DOM). During the boom period homes stayed on the market for about a month and now approximately 4 months – a normal market!

Also, seller’s seem to be making price concessions even if the for sale inventory is low. To me this is reflective of “fear” in the marketplace.

Why wouldn’t you investigate your own neighborhood housing price trends and determine how your LOCAL market is fairing in today’s economy?

Where are YOU on this Graph?

The Cycle Continues!

As Housing goes.......... So goes the Economy!

When you rearrange the letters

Unknown source:

PRESBYTERIAN:
When you rearrange the letters:
BEST IN PRAYER

ASTRONOMER:
When you rearrange the letters:
MOON STARER

DESPERATION:
When you rearrange the letters:
A ROPE ENDS IT

THE EYES:
When you rearrange the letters:
THEY SEE

GEORGE BUSH:
When you rearrange the letters:
HE BUGS GORE

THE MORSE CODE:
When you rearrange the letters:
HERE COME DOTS

DORMITORY:
When you rearrange the letters:
DIRTY ROOM

SLOT MACHINES:
When you rearrange the letters:
CASH LOST IN ME

ANIMOSITY:
When you rearrange the letters:
IS NO AMITY

ELECTION RESULTS:
When you rearrange the letters:
LIES - LET'S RECOUNT

SNOOZE ALARMS:
When you rearrange the letters:
ALAS! NO MORE Z'S

A DECIMAL POINT:
When you rearrange the letters:
I'M A DOT IN PLACE

ELEVEN PLUS TWO:
When you rearrange the letters:
TWELVE PLUS ONE

11-11-11

Taxes……….Taxes!!!

Have you read your latest cable bill lately? 10% of the bill is for taxes. The following taxes are as described on my cable bill:

State Sales Tax

E-911 Surcharge

Federal Universal Service Fund

Telecommunications Relay Surcharge

FCC Fee

FCC Regulatory Fee – Voice

Federal Regulatory Recovery Fee

State and Local Sales Tax

Really?! It would be interesting to find out exactly where our money goes because we can’t negotiate these charges and we pay on blind faith? It seems like state sales tax is being charged twice!! It would also seem that we are paying a sales tax on a service rather than a product.

In my spare time, I will research the “Federal Universal Service Fund” and let you know where and your money is being used by?

Quote on Engineering:

“It is a great profession. There is the fascination of watching a figment of the imagination emerge through the aid of science to a plan on paper.

Then it moves to realization in stone or metal or energy. Then it brings jobs and homes to men. Then it elevates the standards of living and adds to the comforts of life.

That is the engineer’s high privilege.

To the engineer falls the job of clothing the bare bones of science with life, comfort, and hope.

No doubt as years go by the people forget which engineer did it, even if they ever knew. …….

but the engineer himself looks back at the unending stream of goodness which flow from his successes with satisfactions that few professions may know.

I believe, in 1954, Herbert Hoover , our 31st President and only practicing engineer before becoming President was speaking about a land development engineer.

Worth Waiting?

The overall Case Shiller composite of the metro markets shows another trend line “up”. I do look for trend lines and not so much what the current prices are ---- after all it remains a buyer’s market in most states but not in every local market!

This latest graph shows a volatile trend line bouncing along the bottom. Prices are reacting to the vicious cycle of job loss – foreclosures – price reductions and start over again. The interesting aspect of the graph is that the trend line is contained within a relatively small range for a period of time.

Of course, the pricing trend lines will give you an idea of how the national market is reacting but you need to focus on:


1. Local Market

2. Monthly Cost

Housing history has shown us that housing appreciates over time. If you want to establish roots in a community and buy a home for your family, why would you wait?

The key is the monthly cost!!

The following illustration shows the price of the home increasing but the monthly COST decreasing --- simply because of the interest rates.

There is no better builder of equity over the long term than real estate. If you can minimize your cost below your monthly rent, why would you not consider buying a home for long term equity building rather than give your money to a landlord?

Credit Scores – Myths & Truths

The following questions and answers are a result of a Bankrate.com session on FICO® Scores. I have summarized the information posted by Rachel Bell.

1. Does the credit report include the FICO® Score?

The credit report does not contain any scores. The credit report contains your credit history gathered by the credit bureaus. It basically shows your history or use and repayment of credit. It also shows your pursuit of credit.

Your credit report should be checked for accuracy. You can obtain a free credit report once a year from http://www.annualcreditreport.com/. A credit score helps lenders understand the information contained in your credit report.

2. Will your FICO® Score be affected by applying for a line of credit or extending a line of credit?

The credit inquiry may show up on your credit report. This may affect your credit score depending on the type of credit and if you have made similar requests over the past year.

The FICO® Score will not be affected by shopping around for the best mortgage, auto or student loan within 30 days prior to scoring. Your credit score is not affected by seeing a credit counselor.

3. Are all credit scores FICO® Scores?

90 of the top 100 U.S. lenders use FICO® Scores. Other credit scores may be misleading and may not be accepted by these lenders. FICO® Scores can be purchased at www.myFICO.com.

Remember FICO® Scores are used by lenders to make their credit decisions. Other credit scores that are NOT labeled “FICO® Score” are prepared using different methodology and may be misleading.

4. Is your credit score used by lenders to give credit?

Credit scores are a quick way for lenders to understand your credit history. Each lender will approach a credit inquiry differently and many will consider other information to help them make an informed decision.

Establishing a high FICO® Score is a result of paying your bills on time, keeping your credit card balances low, and applying for credit only when necessary.

I have been told by mortgage lenders that the FICO® Score in many instances is different from other types of credit scores. You may think you have a 730 credit score but your FICO® Score may be substantially different. What I do know – the higher the FICO® Score, the better chance of obtaining credit at more favorable interest rates.