Thursday, February 28, 2013

Bull Trip!: GDP Report Q4 2012 (Second Estimate)

Today, the Bureau of Economic Analysis (BEA) released their second "estimate" of the Q4 2012 GDP report showing that the economy barely registered growth in Q4 2012 with real GDP improving at an annualized rate of just 0.1% from Q3 2012.

On a year-over-year basis, real GDP increased 1.61% while the quarter-to-quarter non-annualized percent change was an increase of a slight 0.03%.

The latest quarterly results indicate that the most notable source of weakness in the economy came from declines in exports with the "net-exports" component declining at an annualized rate of 3.9% from Q3, and notable declines in government spending particularly on national defense with a 22.0% decline in federal national defense spending from Q3.

Residential investment, on the other hand, worked to buoy the overall fixed investment component growing at an annualized rate of 17.5% from Q3.

Keep in mind that these results are likely very poorly estimated and are sure to be revised notably in following quarters and even years to come.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims February 28 2013

Today’s jobless claims report showed a notable decline to both initial and continued unemployment claims as initial claims trended below the closely watched 400K level.

Seasonally adjusted “initial” unemployment claims declined by a notable 22,000 to 344,000 claims from 366,000 claims for the prior week while seasonally adjusted “continued” claims declined by 91,000 claims to 3.074 million resulting in an “insured” unemployment rate of 2.4%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 2.00 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.66 million people that are currently counted as receiving traditional continued unemployment benefits, there are 5.67 million people on state and federal unemployment rolls.

Wednesday, February 27, 2013

Open House Alert!

Ready, set, 115 Raspberry in Scenic Meadows!  Come Sunday, March 3rd - I will be there from 12:00 to 2:00 showing off this lovely 5 bedroom, 2.5 bath home high on the hill.  It has three levels of living space - the bedrooms up, the family, living and dining rooms on the first floor, and then another kids' play area as well as a bar and office in the basement.

Please tell me you saw this blog - it will make my day!  And let's hope we have gorgeous, sunny weather and blue skies so you can really take in the view.

From 690, take 695 (Route 5) towards Auburn.  When you get off, turn right at the light and an immediate right onto Scenic Drive.  Within half a mile you will come to Raspberry on the left.  Go up the hill - tour around the community - and return to #115.  Refreshments and a great home await!

Reading Rates: MBA Application Survey – February 27 2013

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as the volume of both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) went flat at 3.66% since last week while the purchase application volume declined a notable 5% and the refinance application volume declined 3% over the same period.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).

Pending Home Sales: January 2013

Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for January showing that pending home sales improved notably with the seasonally adjusted national index jumping 4.5% from December and increasing 9.5% above the level seen in January 2012.

Meanwhile, the NARs chief economist Lawrence Yun suggests that while contract activity is on the rise, overall sales for 2013 are projected to increase less than in 2012 while prices should continue to climb:

"Over the near term, rising contract activity means higher home sales, but total sales for the year are expected to rise less than in 2012, while home prices are projected to rise more strongly because of inventory shortages..."

The following chart shows the seasonally adjusted national pending home sales index along with the percent change on a year-over-year basis as well as the percent change from the peak set in 2005 (click for larger version).

Tuesday, February 26, 2013

Good for Greg Mankiw...

New Home Sales: January 2013

Today, the U.S. Census Department released its monthly New Residential Home Sales Report for January showing a notable monthly increase with sales rising 15.6% since December and rising 28.9% above the level seen in January 2012 but remaining at an historically low level of 437K SAAR units.

It's important to recognize that the inventory of new homes appears to now be bouncing around a very low 150K units, near the lowest level seen in in at least 47 years while the median number of months for sale has worsened slightly to 4.7.

The monthly supply dropped to 4.1 months while the median selling price increased 2.12% and the average selling price increased 7.75% from the year ago level.

The following chart show the extent of sales decline to date (click for full-larger version).

FHFA Monthly Home Prices: December 2012

Today, the Federal Housing Finance Agency (FHFA) released the latest results of their monthly house price index (HPI) showing that in December, nationally, home prices increased 0.63% from November and rose 5.99% above the level seen in December 2011.

The FHFA monthly HPI are formulated from home purchase information collected from mortgages that have been sold to or guaranteed by Fannie Mae and Freddie Mac.

S&P/Case-Shiller: December 2012

Today's release of the S&P/Case-Shiller (CSI) home price indices for December reported that the non-seasonally adjusted Composite-10 price index increased a slight 0.25% since November while the Composite-20 index increased 0.16% over the same period.

The latest CSI data demonstrates, more or less, that the typical seasonal pattern is continuing to play with price weakness coming as a result of lower seasonal transactions.  If this trend continues, prices should continue to remain flat to decline into the February-March release in advance of the typical uplift from the more active spring transactions.

It's important to recognize though that on a year-over-year basis, nominal prices remain in positive territory possibly indicating the current seasonal weakness may be minor compared to recent years.

The 10-city composite index increased 5.95% as compared to December 2011 while the 20-city composite increased 6.84% over the same period.

Both of the broad composite indices show significant peak declines slumping -29.96% for the 10-city national index and -29.33% for the 20-city national index on a peak comparison basis.

To better visualize today’s results use to view the full release.


Real estate, as I have said before, is my "encore career," a nice descriptive phrase I picked up from the paper today (see for the article).  Although the reference cites many examples that have to do with finishing one career and then going into another for a less profitable, more altruistic motive, I still like the idea of "encore."  Except in my case, I think teaching and administration was more a prelude and real estate is my primary career!

When I worked in schools, I mostly received a paycheck every two weeks or bi-monthly.  It wasn't the greatest paycheck (my Waldorf School experience in Saratoga stands out) but it was a paycheck I could rely on for the most part.  Health insurance was paid for or partially paid by the district (except for again, the Waldorf School).  I think real estate is fairly far removed from my administrative days at Spring Hill, but I wouldn't have lost those two years for any amount of money.

So I live commission to commission, working out how to get through the slow times and what to do with the money during the affluent times.  Brian Buffini again, as mentor, has taught me how to do this.  When I first started I was caught up short by the taxes one year.  The last year I was ever caught short, I might add.  Suddenly my good amount of commission was held hostage by April 15th and I had to find that money somehow.  Which I did, thanks to a home equity loan.  But I was lucky to have that.

These days are different.  I still have to buy my own health insurance, but I have managed to find a program that works for me.  Forget dental or vision insurance for now.  The de-stressing I've been doing has helped to keep me from grinding my teeth at night - so it does pay off!  I have dues to the national Realtor board, the local board, and payments for the use of my lockbox key.  I buy my own signs and advertising, but I like that.  I make the choices.  And of course RE/MAX takes a part of each commission.

So when I do have a check, I parcel it out.  Currently 40% gets immediately thrown into savings off the top for taxes and a retirement account.  Another 20% goes into my separate business account to pay for advertising, signs, dues and gifts.  A second 20% goes into our joint account; that pays for our mortgage, household expenses and New York State property and school taxes.  Then 10% goes to that home equity I took out years ago to pay down.  The remaining 10% goes to my checking account, so I can pay for my cars, trips to Manhattan, SU games, health insurance and entertainment.

The tellers love to see me come in with everything sorted out...but nowadays I don't worry about where my tax money will come from in April.  I don't have six months put away for emergencies and I know I need to work on that, but I would rather pay down the HELOC and draw from that if need be.

Overall, I am much happier by far than when I got a regular paycheck and certainly much better off financially.

Monday, February 25, 2013

Why is the luxury housing market recovering so well?

The fashionable thing to say is because of foreign money.  I suspect the actual reason is that the one percent have gotten 122 percent of the recovery (h/t/ Tim Noah).

The demand curve for housing among the rich has shifted out.

The Chicago Fed National Activity Index: January 2013

The latest release of the Chicago Federal Reserve National Activity Index (CFNAI) indicated a notable weakening for the national economy with the index falling to a very low growth level of -0.32 from a level of 0.25 in December while the three month moving average improved to a level of 0.30.

The CFNAI is a weighted average of 85 indicators of national economic activity collected into four overall categories of “production and income”, “employment, unemployment and income”, “personal consumption and housing” and “sales, orders and inventories”.

The Chicago Fed regards a value of zero for the total index as indicating that the national economy is expanding at its historical trend rate while a negative value indicates below average growth.

A value at or below -0.70 for the three month moving average of the national activity index (CFNAI-MA3) indicates that the national economy has either just entered or continues in recession.

Sunday, February 24, 2013

No More Vacant Homes - A Great Idea

This morning in the Sunday Post-Standard I read with great interest Stephen Kimatian's article in the Opinion section of the paper.  I had had this thought before, but he put it very succinctly and illustrated it with actual facts and a compelling story.

His thesis in "How one effort can help vacant homes, unemployment at the same time" is simple.  Syracuse has an overabundance of vacant houses, just sitting there waiting for help that won't come from the owners, previous or otherwise.  It also has a strong community which dislikes vacancy and works hard.  Combine the two, and you have dozens of "Marios," Kimatian's subject.

Mario bought a vacant house, fixed it up and rented it out.  That went so well he did it again - and again.  To date he has rehabilitated on his own ten houses.  These are now ten houses that not only produce rent for him, but also are on the tax rolls.  Not only that, they have filled a need for families who will round out our workforce in our rapidly developing city.

Mario is an entrepreneur.  He is unlike the entrepreneur who "rented" out the vacant house next to my in-laws.  This person took rent for months until the people found out he had no legal right to rent the house.  The tenants were out money and had to leave the house rapidly.  Not good for them, their kids, or the neighborhood.  So why not allow someone to develop the house?

Kimatian cites figures.  He suggests the houses would cost somewhere around $20,000 and then with money for renovations he projects still a good income for the rent.  Mario now brings in about $60,000 a year - not bad for working on your own, at your own pace, in your own time.  And if he is like investors I know he has learned that doing it right the first time will help to ensure no midnight phone calls from the tenants.

Wouldn't a city filled to capacity with willing and able tenants, houses with lights on inside at night, children going to school and taking advantage of the "Say Yes" program be worth a great deal?  So, Mr. Kimatian - how do we make this happen?

Saturday, February 23, 2013

The future of efficient transportation

Might look like this:

I heard a lecture from Alain Bertaud on how networked, scheduled transportation is not a good solution for many people--even in poor parts of the world.  And I can testify that auto rickshaws are often the best way to get around cities in India--they are quick, cheap, and when fueled by natural gas, environmentally not too bad (those with two stroke engines are a whole other matter).

One of the most provocative things I learned from Alain is that buses are often less fuel efficient than cars--for a bus system to work, they have to run at periods where demand is fairly low.     As it happens, while sitting at dinner in downtown Los Angeles last night, we watched bus after bus on 6th Street go by nearly empty.

Friday, February 22, 2013

Grow Your Way Out of Federal Largess?

Recently, a slew of know-it-all Keynesian policy junkie types have hit the media with suggestions that those in favor of limited government (or a merely a more limited version than the current incarnation) style budget cuts are dwelling too much on the numerator of the debt-to-GDP ratio and not enough on the denominator.

The suggestion being that we could easily turn around our insolvency problem if the government would simply focus on GDP growth and NOT on the growth of federal spending.

A quintessentially maniacal Keynesian solution indeed!.... Better, smarter government spending will stimulate GDP growth enough to reduce the debt-to-GDP!

Ha! What absurdly delusional times these are.

Reader... let's first establish a few basic facts and then take some time to absorb the chart below.

Nominal GDP has a trailing 20 average annual growth rate of 4.71% while the average growth rate for nominal federal government debt is 7.41%.

Right there you can see a problem, for the last 20 years, GDP has been growing at nearly half the rate of federal government spending.

But taking the Keynesian policy junkies contention seriously for a moment, let's assume that "smart" policy makers could manage to generate an 8% annual nominal GDP rate... a literal farce.... and kept the federal government spending pumping along at it's average 7.41%.

Even given this absurd growth assumption, debt-to-GDP would remain above 100% till 2018 and would still be at a level of 82% in 2050!! ... bear in mind, the debt-to-GDP averaged roughly 50% during the 40 years preceding 2008.

Sorry policy junkies, you can't grow your way out of it federal largess... and certainly not with MORE largess... bring on the cuts and LOTS of them!

Agent as Tour Guide

When I first started doing real estate in 2001 I was told by a woman who owned a business in town that she used to do it.  She said she stopped because she felt she was a glorified tour guide.  Most of the time no one bought a house through her, but she spent hours showing people the area.

I just spent the last two afternoons being a tour guide - but in this case, a very happy tour guide.  A prospective client came from out-of-state to see Central New York and decide whether to accept a position that had been offered.  My job was to familiarize him with the communities within a few minutes commute and show him a few housing options.

We had a wonderful time, despite the snow (coming in February is tough!).  We wandered the first day from Auburn to Syracuse, took in Skaneateles, Marcellus and Camillus, and went up to the University and over to Destiny.  I saw the area through his eyes, which made it very instructive for me.  He saw new building, especially in Syracuse.  The buildings on campus and in Armory Square convinced him (as well it should) that Syracuse is a thriving and growing community.

On Thursday we saw homes:  a good rental in Auburn (unlisted), and then single families in Camillus.  He saw that the prices were excellent, compared to his current situation, and he had choices.  I got to see homes I wouldn't see on brokers' opens, and re-familiarize myself with the market.

So, yes, I was a tour guide - and I was my best client!

Thursday, February 21, 2013

Winner Winner...

Well the time has come to announce the winner of my fabulous Bellatique Giveaway ...

If you have not "Liked" Bellatique on Facebook yet you will for sure want to because their cute Spring stuff is to die for and very very affordable!

Thank you so much to everyone who entered to win!
We had over 350 entries!! 

The Winner of a RealDana Top and Charming Necklace is ... 
(and I swear this was not rigged, so crazy!!!)

One of my favorite bloggers from right here in Lexington KY!!
So crazy!!

Miss Brooke!!

She is so adorable. I love her blog so so much. She has the funniest and cutest stuff over there! Go check out her blog HERE if you're not already! 

Brooke you will look so cute in your RealDana Top :) 

Bellatique will contact you about your winnings:) 

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Recession Watch 2013: Federal Debt to GDP

The year 2012 marked the first time in at least 40 years that total federal government debt surpassed the total nominal GDP.

In fact, the debt-to-GDP ratio lurched over the 100% mark in the first quarter of 2012 and never looked back, continuing its trend upward and now seems destined to close the gap to 102% before long.

Yes, it's just a single measure and in many circles these days (particularly Keynesian policy junkies) hardly stirs the slightest concern, but, be that as it may, it's worth tracking as eventually this relationship may ultimately be recognized as one of the strongest and most damming pieces of evidence against the solvency of the U.S. government.

The Philly Fed Business Outlook Survey: February 2013

The February release of the Federal Reserve Bank of Philadelphia Business Outlook Survey (BOS) indicated an worsening of the regions manufacturing activity with the current activity index declining to a contraction level of -12.5 while assessments the future activity index increased to a level of 32.1.

The following chart shows the current and future activity indexes both with their corresponding 3-month moving averages. The red line marks the threshold between contraction and expansion for these diffusion indexes.

Existing Home Sales Report: January 2013

Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for January showing a slight monthly improvement in sales with total home sales climbing 0.4% since December and climbing 9.1% above the level seen in January 2012.

Single family home sales also improved slightly rising 0.2% from December and still rising 8.5% above the level seen in January 2012 while the median selling price increased a notable 12.6% above the level seen a year earlier.

Inventory of single family homes declined notably from December to 1.55 million units dropping 25.5% below the level seen in January 2012 which, along with the sales pace, resulted in a monthly supply of 4.3 months.

The following charts (click for full-screen dynamic version) shows national existing single family home sales, median home prices, inventory and months of supply since 2005.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims February 21 2013

Today’s jobless claims report showed a jump to both initial unemployment claims and continued jobless claims as initial claims trended below the closely watched 400K level.

Seasonally adjusted “initial” unemployment claims increased by a whopping 20,000 to 362,000 claims from 342,000 claims for the prior week while seasonally adjusted “continued” claims increased by 11,000 claims to 3.148 million resulting in an “insured” unemployment rate of 2.4%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 1.84 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.66 million people that are currently counted as receiving traditional continued unemployment benefits, there are 5.51 million people on state and federal unemployment rolls.

An SU Bit of a Rant

This Saturday at the SU-Georgetown basketball game at the Dome a record number of people will attend the game.  They've managed to squeeze in another few seats to create a new record.  The demand arises from the last Dome appearance for arch rival Georgetown while the two teams are in the rapidly descending Big East conference.  SU leaves next year for the Atlantic Coast Conference.

Ten years ago SU won the NCAA Division I basketball championship with Carmelo Anthony as the star freshman.  He left after one year and has certainly taken the NBA by storm.  There is talk this year of him winning the MVP for bringing the Knicks back to prominence.  He is a star, both for the NBA and our Olympic team.

His jersey will be retired on Saturday at halftime.  I haven't seen official word that he will be at the game, but everyone I talk to says he will.  And the Knicks aren't playing - I checked - so he most likely will be there.  He has also contributed towards the building of the Carmelo Anthony training center on campus.

My rant.  In the rafters where his jersey will come to rest is a banner celebrating the 2003 championship.  Coach Boeheim is featured prominently as are Gerry McNamara (the incredible guard with amazing 3-point ability) and Carmelo.  No one else.  No rest of the team, just these three.

Not right, in my opinion.  The team deserves to be there.

Adding to this is my tendency to like not the stars, but the guys who don't get the adulation.  Currently I like Jerami Grant, a freshman who has great basketball knowledge and is working to pull it all together.  But he's nowhere near a star.  On the 2002-2003 team I loved a sophomore named Hakim Warrick.  Long arms, great blocker, and quiet guy.  The boards featured sayings like "Mac to Hak" when he and Gerry combined.

During the final game as the minutes wore down Hakim had an indelible block that was caught on film.  I bet you could look it up now online.  It virtually assured us the championship.  But his photo - and I stress - the rest of the team - is not on the banner.

So that's my rant.  He and other members of that team will be there Saturday to congratulate Carmelo and be congratulated themselves for their feat.  I just wish it would be acknowledged that a TEAM won the championship, not just a few guys.

Wednesday, February 20, 2013

Wedding Wednesday:)

Shew ... whoever said planning a wedding is stressful was RIGHT!

Good grief ... 

I always said I would never be the stressed out bride. 
I would be the "go with the flow" never crazy or bitchy, just excited and happy ... 

Welllll, that bird has flown the coup friends .. I am officially stressed! 
(of course not crazy or bitchy though..yet! ha!)

hahahahaha this is hysterical!
Don't fret, this is not me, there are probably only about 3 people in the world I would actually like to punch in the throat, and they have nothing to do with the wedding lol!!
 (and no no no I won't name them, I'm not talking bad about people for lent this year ha) 

I think it is all the small little details that I am stressing about (not to mention I have OCD) and then also just getting things done in a timely manner when you work 60 hours a week and try to have a life at the same time, makes things a little more difficult too. 
Plus don't even get me started on how expensive all this stuff is!! Who knew forks and tables and bathrooms could add up to be so much? Every time I get on Pinterest I feel like I need to order something else ... Or I make a decision on something and get on Pinterest and see something totally different that I like better! 

hahaha again, hysterical and true. 

Poor Chris... I told him today the wedding is just going to be a total surprise party to him because I tell him something, then change my mind and forgot to tell him the new idea lol ;)
 He is so sweet ... he mostly cared about 4 things ...
1. The food 
2. The cake 
3. Me wearing my hair down and wavy like he likes it ha
4. and just marrying me ... and being happy :) 
So sweet, I know, but that is truly what he says and what he cared about, the rest he said he trusts my taste and judgement and I have never picked out anything thus far in our house, clothes, etc that he didn't like.
I think he will like everything ... if not .. you know what they say ... 

 I am full of these today, can you tell? hahahaha

In all reality ... I am in love with my wedding dress.
It hasn't come in yet, but I look at the pictures of it daily on my phone ha. I just love it. 
BUT ... does anybody but me have this feeling ... 

I am TERRIFIED that I will see another dress I like more!!
So I keep trying to skim past them really fast when I am scrolling down Pinterest lol 
We for serious need a filter for this!! ;) 

So today I met with my florist and in all honesty it made me feel so much better!
I am so excited about the flowers and decor ... and wanted to share a sneak peak ... 

Obsessed with these!
Some of the tables will have the tall arrangements with the birch wrapping which I am in love with .. but lots more flowers in them (this was a fake arrangement for sale in there for inside a house) so mine will have more flowers and blush tones with more moss etc! So cute! 

We will have the urns with candles everywhere on some tables ... just kind of to give it some dimension something different with the flowers too :) 

Lots of barnwood like this with cutouts for the candles and then instead of those little green things these will be moss and hydrangeas and blush roses etc! Sooo pretty and elegant :) 

I decided on these for all the guys ... I think they are perfect. Just the perfect touch of elegance yet still a little rustic too ;) Chris's will be a little different I think to make him stand out. 

So all in all today we actually got a lot accomplished and I am super excited about all the flowers, but want to leave some big things with them a secret ... so you'll have to wait on those!! ;) 

I am getting more and more excited ... just need to get all the small stuff knocked out so I can make it to June and then ... 

killing me today. 

No but really, this is what I am trying to keep in mind:

So true. 
Love it. 

Well, that's all the wedding talk I've got for ya today!
I am going to share our Save the Date's later this week also .. just need to get a good picture of them! 

PS. Look at this sweet, handsome baby on his walk this week ... just taking in the sunshine and breeze ... 

Love him so much. 

PSS. My Bellatique giveaway is over tonight with a whopping 354 entries!! 
Wow! So tomorrow I will announce the winner winner chicken dinner!

Don't forget to go "like" them on Facebook HERE ... 
Super cute new Spring stuff coming on daily and also the jewelry is the cutest and super duper cheap! 

Off to catch up on my DVR and snuggle with Chris & Frankie :) 

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