Tuesday, April 30, 2013

Bob and Decorative Painting

My daring and creative husband, Bob, just spent the last four days at a seminar on decorative painting.  While this is his specialty, there's always more to learn.  Years ago he took a course in South Carolina to learn the art of wood-graining.  There's a steel staircase in Crouse Hall on the Syracuse University campus that looks like wood.  You wouldn't know which one, because it looks like every other wooden staircase.

When he saw a course offered by Golden Paints to be taught by the world-renowned painter, Pierre Finkelstein, he immediately signed up.  The great news was that Golden Paints, the company hosting the seminar, is in New Berlin, about 80 miles away from our home.  It turned out he was one of the closest students - others flew in from all over the country to take the class.

They worked solid for three days learning the techniques, about the brushes (badger hair), and using the superb paints manufactured and sold by the decades-old company.  Go to http://GoldenPaints.com and read the history.  It's a remarkable company, brand, and force in the artistic community.  They have artists in residence, as well as people who make the paints that go all over the world.  The color charts are like none you have ever seen before, as well as the colors they offer. The iridescents are my favorite.

Finkelstein and his assistants are based in Manhattan, but travel in order to teach.  A working painter, his blog is fascinating.  One minute at the Louvre, the next in an office space, then on to some other destination.  Bob and 15 others were privileged to work with him.  Open http://PierreFinkelstein.com to learn more about him and read his Blog for the Craft of Decorative Painting.

I have seen Bob's work and marveled at it now for years.  I am glad he went.  And of course, since we are all so connected, a woman he met at Golden Paints turned out to be the sister of a woman who had bought a house in Skaneateles through me years and years ago.  And a fellow painter who had come up from Texas grew up on the road to the north of us at the lake... Small world....

Shameless plug alert:  If you are looking for a painter who can take an old metal door and make it look like wood, or a column and make it appear to be marble, or massive stones in a church....find me and I will put you in touch with Bob.  Or just call Purcell's or Sherwin Williams and ask for Bob, the decorative and faux painter.

S&P/Case-Shiller: February 2013

Today's release of the S&P/Case-Shiller (CSI) home price indices for February reported that the non-seasonally adjusted Composite-10 price index increased for a straight month rising 0.37% since January while the Composite-20 index increased 0.29% over the same period.

The latest CSI data is continuing to demonstrate more resiliency than seen in recent years as prices continue to move up even in the face of typically lower seasonal transactions.

If this trend continues, rather than declining as has been seen in past years, prices may just remain flat into the March-April release in advance of the typical uplift from the more active spring transactions.

The 10-city composite index increased 8.60% as compared to February 2012 while the 20-city composite increased 9.32% over the same period.

Both of the broad composite indices show significant peak declines slumping -29.63% for the 10-city national index and -29.03% for the 20-city national index on a peak comparison basis.

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

Monday, April 29, 2013

Pending Home Sales: March 2013

Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for March showing that pending home sales improved with the seasonally adjusted national index climbing 1.5% from February and increasing 7.0% above the level seen in March 2012.

Meanwhile, the NARs chief economist Lawrence Yun is beginning to adopt the "narrow range" sentiment of years past as limited supply works to mute sales activity:

"Contract activity has been in a narrow range in recent months, not from a pause in demand but because of limited supply. Little movement is expected in near-term sales closings, but they should edge up modestly as the year progresses, ... Job additions and rising household wealth will continue to support housing demand."

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).

Continuing Education - Environmental Issues

On the 23rd, I took another course:  Environmental Issues with Steve Selig.  His class was contact-packed - I took five pages of notes and we rolled through short breaks and lunch, frankly, I thought, eager to get back to learning what he had to teach.  A complex person - attorney, environmental activist, home inspector and remediation expert, knowledgeable in what seemed like everything related to the environment.

The areas he covered were mold, radon, carbon monoxide, water, buried oil tanks,lead, asbestos, and septic systems.  The most amount of time was spent on mold - what it is, what the dangers are, and why it's become a leading concern in the real estate field, both with new construction and resale.  The short video he played was terrifying.  A family had neurological damage from living in a house - huge and expensive - that would never be able to be re-habbed.  The brain damage in the father and son was permanent also.

Very simply put, mold grows where the humidity is above 70%.  Companies that test for mold must put it under the microscope - you can't tell just by looking at it.  If the mold in the house is confined to under a 10 square foot area, then the homeowner can clean it.  If it is about 100 sf then it is considered a "biohazard" and must have mitigation from certified and licensed remediation specialists.

Carbon monoxide poisoning sends 20,000 people to the ER every year.  Of these, 500 die of it.  Keep everything that generates CO away from the house - meaning generators and yes, the family car.  Starting a car in the garage or even the driveway and leaving it running is not a good idea.

Buried oil tanks have a 16 year life span.  In Massachusetts, all buried oil tanks must come out of the ground.  Even if the tank is no longer filled or used, it should come out of the ground within a year to keep it from possibly polluting the soil.

Lead.  The #1 source of lead pollution in the U.S. is batteries in landfills.  Steve went over the guidelines for painting and remodeling when lead is present.

There is no simple test for asbestos.  It's been known to be a problem since 1884 - but not until the 1920s was it acknowledged.  It is actually a mineral - very strong, impervious and excellent for strengthening building materials.

Septic systems need to be pumped every one to five years.  The average life of the system is 20 years.  If you sell a home in Massachusetts, you must bring the septic system into code for that year.

Fascinating - all of it.  I made notes to tell Bob some of the things we need to do around our house, including putting a CO detector in the apartment for when Rachel and Alex come to visit. We also need to pull our old buried oil tank now that we've stopped using it...I've known that, but now it's a priority.  Continuing ed - thank you!  I learn a lot for my business, and also for myself.

Sunday, April 28, 2013


I saw again one of my favorite movies, Julia, last night.  It was made in 1977 and stars Jane Fonda, Vanessa Redgrave, and Jason Robards.  Fonda plays Lillian Hellman to Robards' Dashiell Hammett.  Redgrave is lovely as Hellman's friend Julia.  Maximillian Schell and Meryl Streep (her first film part) have small roles.

Great, true story.  Everything moves back and forth through time.  Lillian and Julia are young school friends, Julia quite wealthy in terms of money but with a paucity of family life.  Lillian is taken with her, and reveres her free spirit and brilliance.  It's 1934 when the film opens, and Lillian is trying to complete her first play.  Julia is in medical school in Cambridge, looking forward to possibly working with Freud.  A good story, of friendship and love, war and peace, action and inaction.

What I love about it also, as I did when I first saw it, are the settings.  Gorgeously filmed, it takes you from a perfect Cape Cod cabin - weathered shingles, privacy, messy but comfortable interior - to a veritable castle just outside NYC where Julia and her very staid grandparents' reside at times.  The room in which the girls play word games and laugh and talk about the future is a child's dream of a bedroom, before Pottery Barn came along.

This is contrasted by the hell that was overtaking Europe at that time.  Lillian goes to write in London, then to Austria - the grayness and damp is palpable.  Scenes, sets - all of which make the movie come alive.  The opening and ending - an old woman sitting in a boat (Lillian Hellman herself, actually) - is a memorable portrait.

I take from this how tied we are to where we are.  The Hellman and Hammett of the Cape are vastly different from the restaurants of NYC or Parisian hotels.  But each as beautiful in their own way.

Friday, April 26, 2013

Bull Trip!: GDP Report Q1 2013 (First Estimate)

Today, the Bureau of Economic Analysis (BEA) released their first "estimate" of the Q1 2013 GDP report showing that the economy grew in the quarter with real GDP improving at an annualized rate of 2.5% from Q4 2012.

On a year-over-year basis, real GDP increased 1.80% while the quarter-to-quarter non-annualized percent change was an increase of 0.62%.

The latest quarterly results indicate that the most notable source of weakness in the economy came from declines in government spending particularly on national defense with a 11.5% decline in federal national defense spending from Q4.

Residential investment, on the other hand, worked to buoy the overall fixed investment component growing at an annualized rate of 12.6% 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.

New Construction - Continuing Education

Every two years we have to take classes to continue our license.  I generally end up with about 25 hours.  I've taken two courses recently - my license is up for renewal in August - and I want to share some of what I learned.

First of all, I like going to class, even if it is all the way up to Taft Road in North Syracuse, because I get a chance to see people out of our ordinary sphere.  Get fresh perspectives, or actually meet people with whom I've spoken but never encountered.  I could take classes online for the credits, but sitting at a computer all day is not what I want to do.  So off I go...

We had about 20 people in class for "Representing Buyers for New Construction."  The instructor, John J. Waugh, enjoyed the back and forth of the class and encouraged it.  A lot was general talk, and answering questions as they came up.  As I look over my notes I think it best to simply list facts I thought interesting or relevant.

  • 90% of all the homes built by buyers are not represented by a real estate agent.
  • Because of this, according to the statistics cited, homes will cost 20% more than if the buyer had been represented.
  • There are an average of 1,784 decisions to be made when building.
  • Some of the best builders are in the Northeast.
  • Marvin Windows are the most energy efficient.  
  • Cold air returns for a forced air furnace should be in every room.
  • Gutters are important: they keep water from the foundation and save the roof.
  • The cost is only about $800 for a 2,600 square foot house.

I have been representing buyers who build with builders most of my career.  I don't know a great deal about building, but I have found that I do have value in the process.  I think every agent who takes the time to be involved does.  If nothing else, agents have another set of eyes to look at plans critically, ask questions, 
and watch as the process unfolds.  While some Realtors felt they were shoved aside, the builders I have known are open to my involvement in the process.  

Thursday, April 25, 2013

Extended Unemployment: Initial, Continued and Extended Unemployment Claims April 25 2013

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

Seasonally adjusted “initial” unemployment claims declined by 16,000 to 339,000 claims from 355,000 claims for the prior week while seasonally adjusted “continued” claims declined by 93,000 claims to 3.0 million resulting in an “insured” unemployment rate of 2.3%.

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 1.79 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.20 million people that are currently counted as receiving traditional continued unemployment benefits, there are 4.99 million people on state and federal unemployment rolls.

Tuesday, April 23, 2013

New Home Sales: March 2013

Yesterday, the U.S. Census Department released its monthly New Residential Home Sales Report for March showing a improvement with sales climbing 1.5% from February and rising 18.5% above the level seen in March 2012 but still remaining at an historically low level of 417K SAAR units.

It's important to recognize that the inventory of new homes appears to be mounting as unsold units totaled 153K, still though near the lowest level seen in in at least 47 years while the median number of months for sale went flat at 5.0.

The monthly supply went flat at 4.4 months while the median selling price increased 3.0% and the average selling price declined 1.3% 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: February 2013

Today, the Federal Housing Finance Agency (FHFA) released the latest results of their monthly house price index (HPI) showing that in February, nationally, home prices increased 0.75% from January and rose 7.07% above the level seen in February 2012.

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.

Monday, April 22, 2013

Existing Home Sales Report: March 2013

Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for March showing a decrease in sales with total home sales declining 0.6% since February but still climbing 10.3% above the level seen in March 2012.

Single family home sales also declined falling 0.2% from February but still rose 9.1% above the level seen in March 2012 while the median selling price increased a notable 12.1% above the level seen a year earlier.

Inventory of single family homes increased from February to 1.69 million units dropping 16.3% below the level seen in March 2012 which, along with the sales pace, resulted in a monthly supply of 4.7 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.

The Chicago Fed National Activity Index: March 2013

The latest release of the Chicago Federal Reserve National Activity Index (CFNAI) indicated worsening for the national economy with the index falling to a weak level of -0.23 from a level of 0.76 in February while the three month moving average declined to a level of -0.01.

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.

Friday, April 19, 2013

Open House Alert! 5731 Sandbank Road

This is National Open House Weekend, so there will be many more open houses than usual in our area, and probably across the country.  I was at the Greater Syracuse Association of Realtors for a class this week and picked up my free balloons.  Come see them!

Sandbank Road is actually in Jordan - 13080 - but the Town of Elbridge.  Take Route 5 to Kinney's and turn down the road.  The house is on the left, past the little town park, majestically sitting up on a hill.

The photo I've chosen is the view out the window of the great room.  The property is over 1.5 acres, and truly like its own park.  You can walk back, and back, and finally you will get to fields.  But way back there there's a bench where you can sit and contemplate whatever you want to contemplate.

The house is a contemporary, with three bedrooms and two full baths.  Both have large tubs, and the master tub has jets.  It doesn't have a shower now, but the pipes are still there and it could re-emerge with a little bit of work.

As I said before, the main part is a great room - kitchen, dining room and living room.  With that view you see.

Downstairs there's a cozy family room that opens to a three-season room that houses a hot tub.  Surrounding that on the south is a terraced garden, behind the fence you see on the right of the photo.  In the near garden there  are also an above-ground pool and a shed.  Cars are in the attached garage, which also leads to the basement.

It's a great house - ML#S286367 to see more photos.  The price is $229,000.  Please come between 1:00 and 3:00 on Sunday and say you read this blog - I will love it!

The First Twenty - Plus One

As I am writing this I am monitoring the news coming out of Boston.  A dear friend from high school lives in Watertown and is under lockdown.  She has been up all night and is waiting for the police to clear her house.  My heart is with her...I can't imagine this happening in her beautiful, quiet little town.  Or our town - but there's been Newtown and now Watertown.

Since we had 21 closings by April 9th - two on that day - I will post in no particular order the first twenty-one closings.

24 Griffin Street - Village of Skaneateles - $167,000

1666 West Lake Road - Town of Niles - $130,000

37 State Street - Village of Skaneateles - $244,000

1542 Tracy Drive - Town of Spafford - $195,000

14 Hannum Street - Village of Skaneateles - $186,500

4153 Jordan Road - Hamlet of Mottville - $105,000

16 Lakeview Circle - Village of Skaneateles - $545,000

2935 West Lake Road - Town of Skaneateles - $235,000

90 West Genesee Street - Village of Skaneateles - $270,000

1695 Stump Road - Town of Skaneateles - $615,000

593 Stump Road - Town of Skaneateles - $105,250

56 State Street - Village of Skaneateles - $875,000

32 Orchard Road - Village of Skaneateles - $212,000

2272 Cherry Valley Road - Town of Skaneateles - $63,000

2418 Wave Way - Town of Skaneateles - $549,900

2996 County Line Road - Town of Skaneateles - $420,000

2886 County Line Road - Town of Skaneateles - $540,000

63 Jordan Street - Village of Skaneateles - $220,000

4084 Mill Road - Town of Skaneateles - $299,900

1642 New Seneca Turnpike - Town of Skaneateles - $183,000

2122 Terrace Lane South - Town of Skaneateles - $1,100,000

Thursday, April 18, 2013

Reposting from my Forbes blog: the debate on Debt and GDP

Within the past day or so, economics conversations have been all about Rogoff and Reinhart and their critics, Herndon, Ash and Pollin.  The Rogoff and Reinhart (RR) paper purported to show that countries with more debt grow more slowly than countries with less; Herndon, Ash and Pollen (HAP) show that Rogoff and Reinhart’s data contains mistakes, and there is not much dispute about whether Herndon, Ash and Pollin’s corrections are right–they are.
HAP also do a pretty good job of showing that connections between debt to gdp ratio are not robust–they are sensitive to time period and country.  But they do not ask the question about direction of causality between debt and growth (page 3):
For the purposes of this discussion, we follow RR in assuming that causation runs from public debt to GDP growth. RR concludes, “At the very minimum, this would suggest that traditional debt management issues should be at the forefront of public policy concerns” (RR 2010a p. 578). In other work (see, for example, Reinhart and Rogo (2011)), Reinhart and Rogo acknowledge the potential for reverse causality, i.e., that weak economic growth may increase debt by reducing tax revenue and increasing public expenditures. RR 2010a and 2010b, however, make clear that the implied direction of causation runs from public debt to GDP growth.
But the question of direction matters a lot.  Consider a country whose GDP weakens–both tax revenues fall and social spending (on things like unemployment insurance) rises.  This means that in the absence of a policy change, weak GDP leads to higher debt.
There is a simple way to take a first cut at the question of direction of causation–by using a technique known as Granger Causality.  The set up is to try to explain something (such as GDP growth) by looking at its own lagged values and the lagged values of another variable (such as debt-to-GDP ratio).  I took the  data set in Herndon, Ash and Pollen and ran Granger tests using one lag explaining real GDP growth and debt-to-GDP ratios; I ran separate regressions for each country in the data set. I tested for significance at the 90 percent level of confidence.  I am happy to share my results with anyone who is interested (richarkg@usc.edu).
In the tests where I was exploring whether debt-to-GDP “caused” GDP growth, I found that debt’s impact was negative in five countries (AustriaGermany,ItalyJapan and Portugal); positive in four countries (Australia, Canada, New Zealand and Norway), and zero in 11 countries (Belgium, Denmark, Finland, France, Greece, Ireland, the Netherlands, Spain, Sweden, the UK and the US; although France was close to being statistically negative).
RR emphasize that there is a critical point at which debt becomes toxic, and that is at a debt-to-GDP ratio of more than 90 percent.  Doing Granger tests using this variable (on “on-off switch” for a country being at greater than 90 percent), we find that the impact of greater than 90 percent debt on GDP growth is positive in two cases (Australia and New Zealand), and is not statistically different from zero in eight cases (Belgium, Canada, Greece, Ireland, Japan, the UK and the US).  Ten countries have not had debt-to-GDP ratios above 90 percent.
When we look in the other direction, however, the impact of GDP growth on debt is negative 12 times (Australia, Austria, Belgium, Denmark, Finland, Germany, Greece, Ireland, Italy, Japan, Netherlands, and Sweden) and is not statistically different from zero in the eight other countries (Canada, France, New Zealand, Norway, Portugal, Spain, the UK and the US).  Reverse causality IS a big issue here, and until it is really sorted out, we can’t say what the true, structural relationship between GDP and debt really is.

The Philly Fed Business Outlook Survey: April 2013

The March release of the Federal Reserve Bank of Philadelphia Business Outlook Survey (BOS) indicated a slight worsening of the regions manufacturing activity with the current activity index falling to a weak expansionary level of 1.3 while assessments the future activity plunged to a level of 19.5.

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.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims April 18 2013

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

Seasonally adjusted “initial” unemployment claims increased by 4,000 to 352,000 claims from 348,000 claims for the prior week while seasonally adjusted “continued” claims declined by 35,000 claims to 3.068 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 1.78 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.29 million people that are currently counted as receiving traditional continued unemployment benefits, there are 5.07 million people on state and federal unemployment rolls.

Wednesday, April 17, 2013

Reading Rates: MBA Application Survey – April 17 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) declined 4 basis points to 3.52% since last week while the purchase application volume increased 4% and the refinance application volume increased 5% 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).

Tuesday, April 16, 2013

Production Pullback: Industrial Production March 2013

Today, the Federal Reserve released their monthly read of industrial production and capacity utilization showing an increase in March with total industrial production climbing 0.41% since February and rising 3.47% above the level seen in March 2012.

Capacity utilization also improved climbing 0.26% from February rising 1.53% above the level seen in March of 2012 to stand at 78.48%

It's important to recognize that though the "recovery" is well over two years old, both industrial production and capacity utilization are notably below the peaks set in late 2007.

New Residential Construction Report: March 2013

Today’s New Residential Construction Report showed mixed results in March with a notable 26.9% monthly increase in multi-unit housing starts greatly influencing the 7.0% monthly increase to total housing starts while single family housing starts declined by a notable 4.8% since February with total housing permits declining significantly as well.

Single family housing permits, the most leading of indicators, declined 0.5% from February to 595K single family units (SAAR), but increased 27.7% above the level seen in March 2012 but still remained an astonishing 66.91% below the peak in September 2005.

Single family housing starts declined 4.8% from February to 619K units (SAAR), but rose 28.7% above the level seen in March 2012 but still remained 66.04% below the peak set in early 2006.

Monday, April 15, 2013

Homebuilder Blues: NAHB/Wells Fargo Home Builder Ratings April 2013

Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing that assesments of housing activity declined in April with the composite HMI index falling to 42 while the "buyer traffic" index declined to 30.

It's important to note that April continued to show a generally weakening trend, a development that is worth noting as the new home market moves through it's most active months at the start of the year (see Bob Tolls explanation for January - early spring being the new home markets most active period annually).

While all indicators have made truly spectacular improvements this year, it's important to note that conditions still remain fairly distressed by historic standards.

Although, looking at the data, it is fairly clear that the last few months of results indicate a major change in builder sentiment likely coming as a result of improvements in confidence given the notable rise in buyer traffic, reduced inventory and a more balanced monthly supply.

Friday, April 12, 2013

Conspicuous Correlation: Retail Sales March 2013

Today, the U.S. Census Bureau released its latest nominal read of retail sales showing a decline of 0.4% from February, but a gain of 2.8% on a year-over-year basis on an aggregate of all items including food, fuel and healthcare services.

Nominal "discretionary" retail sales including home furnishings, home garden and building materials, consumer electronics and department store sales declined 0.42% from February and slipped 0.64% below the level seen in March 2012 while, adjusting for inflation, “real” discretionary retail sales declined a notable 2.27% over the same period.

On a “nominal” basis, there had appeared to be “rough correlation” between strong home value appreciation and strong retail spending preceding the housing bust and an even stronger correlation when home values started to decline.

The following chart shows the year-over-year change to nominal discretionary retail sales and the year-over-year change to nominal the S&P/Case-Shiller Composite home price index since 1993 and since 2000.

As you can see there is, at the very least, a coincidental change to home values and consumer spending during the boom and then the bust, but as home values have continued to decline, retail spending has remained low but has not continued to consistently contract.

Looking at the chart below (click for full-screen dynamic version), adjusted for inflation (CPI for retail sales, CPI “less shelter” for S&P/Case-Shiller Composite) the “rough correlation” between the year-over-year change to the “discretionary” retail sales series and the year-over-year S&P/Case-Shiller Composite series seems now even more significant.

Skaneateles Real Estate - The Occasional Update

April showers bring May flowers...but ours might be a bit drowned.  The spigots can be turned off now, please....

Did I ever relate this story?  If I did, please forgive me.  It is so classic Central New York!  I was driving down to the bank and thought about the rain, and how at least it wasn't snow.  I got out and a man passed me at the door.  In greeting he said, "At least it isn't snow!"  I swear this was five minutes after I had the thought.  If you are from outside of this area and want to sound like you're from here - just use that phrase.  You will definitely get agreement and a smile.

The update is closer to the last one because I am feeling things happening here.  I have buyers, new ones, and new listings coming up, too.  Other ones have sold or look promising.  So I wondered about the rest of the area.

Currently there are 78 listings in the Skaneateles area of the multiple listing service.  Of these, 20 are in the Village and an equal number are considered waterfront.  As suspected, 6 listings came on in the past 10 days, only one a re-list.  The other five range in price for 1.75 million (not on the water but gorgeous!) to a mid-$100,000 home in the town.  Two others are Village and the last has acreage and a newer-built home.

Under contract there are 14 waiting to close.  Only one new one was added.

The best news is that we have gotten to The First Twenty closings.  The two new ones that sold and closed were both in the lower $100,000 range.  In the next few days I will write up the houses that closed and their published selling price.

Thursday, April 11, 2013

Extended Unemployment: Initial, Continued and Extended Unemployment Claims April 11 2013

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

Seasonally adjusted “initial” unemployment claims declined by a notable 42,000 to 346,000 claims from 388,000 claims for the prior week while seasonally adjusted “continued” claims declined by 12,000 claims to 3.079 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 1.83 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.35 million people that are currently counted as receiving traditional continued unemployment benefits, there are 5.18 million people on state and federal unemployment rolls.

Wednesday, April 10, 2013

Top N Reasons We’re Totally FUBAR

I’ve been mentally compiling a list of points of interest that I find particularly distressing for few years now but just decided to blog them in order to help discern a trend and possibly get a sense of where things are heading.

Unlike other Top-N lists, this list is a pretty free form and un-ordered though over time I hope to make it more organized.

1. Federal Reserve Chairman Ben Bernanke highlighting stock market gains as being a clear benefit and outcome of the Feds QE policy in his 2011 statement: "I do think that our policies have contributed to a stronger stock market, just as they did in March of 2009 … “.  While I don’t necessarily doubt his assertion, this type of statement offers a clear glimpse into both the extent to which the Fed currently operates as a central planner as well as to the magnitude of its bureaucratic conceit.

2. Trillion dollar federal deficits leading to over 100% debt-to-GDP with literally no possibility of bending the curve to insolvency (i.e. nominal GDP growing at an average annual rate of about 4.5% over the last 20 years while federal debt has and continues to grow at about 7.5% over the same period… pretty much says it all).  The numbers being as large as they are, the general population and media is predictably rife with nonsense with commentators routinely quoting wrong or misleading figures partly due to their own ignorance and partly due to a “Richie Rich” effect of sorts where at any moment nonsensical terms like “zillion” might fly right out of the mouths of those discussing federal budget issues without a single objection.

3. BitCoin in that as much as I think the idea is nothing short of fantastic, it CLEARLY is such a radical development that one has to take note of what it appears to indicate… a notable lack of confidence in fiat currency and of manipulative, fiscally profligate nation states.

4. 47 million American’s on Food Stamps which combined with the other “social safety net” policies are quickly placing the burden of providing basic goods and services for roughly half of all Americans on the back of the all current and generations of future taxpayers.

5. Paul Krugman and his ilk of Keynesian policy junkies that piously claim the ability to both determine every “problem” as well as submit for each (quite proudly) the typical statist solution.

6. Today’s On Point entitled “A Second Look at Capitalism” which I really can’t find words to describe other than to note that the sassy and effeminate guest intellectuals were both predictable and derivative.

7. The Occupy “Movement” (and other similar/associated fringe social phenomena) with its schizophrenic philosophy hybridization in which individuals spouting sometimes completely opposing ideas (Occupy Boston had “End the Fed” signs, “Stop Foreclosure Now” signs, community activists, union rabble and even scientologists in the same smarmy soup that was Dewey Square) somehow coexist and even find comfort in the very same filthy tents.

8. Antifragile by Nassim Taleb which is not just an excellent book, it provides (amongst many other interesting insights) one of the clearest explanations of the way in which strong central planning “fragilizes” a society.  Applying the simple linear rational process by which humans have achieved many great things in science and technology is an awful way to “manage” nonlinear and complex systems like the macro-economy yet we continue the march of policy blunders that, like failed forestry “management” (as if mother nature needed the help), will inevitably lead to an epic conflagration.

9. QE infinity, the ZIRP and the Feds balance sheet exploding by over a trillion as it hoards over 10% of all federal debt leading it to currently pump $40 billion monthly into the treasury (no “operation twist” as there are no more short T-bills… just pure bond purchases) and $45 billion monthly into Fannie/Freddie.  This is not just a problem because of the highly fictitious effects that all of this “easing” has on the economy/currency but also because this is the fullest expression of the Feds credibility.  Any additional “crisis” requiring emergency policy action would surely spark a loss of confidence and likely loss of control for the Fed.  There is currently no room for error.

10. The fact that probably 9 out of 10 Americans don’t have the slightest idea of the severity of the current situation… nuff said (for now).

Tuesday, April 9, 2013

Outstanding Contraction!: Commercial Paper Outstanding March 2013

The Commercial Paper (CP) market is essentially a private debt market used by corporations as a generally cheaper means of funding typical recurring operations than drawing on a line of bank credit.

Commercial paper, as financial instrument, is by no means a recent innovation and, in fact, you can read about how the CP market was affected by the many historic financial shocks experienced by the U.S. (read Panic on Wall Street: A History of America’s Financial Disasters)

Although the Federal Reserve was able to artificially bring CP rates down significantly since the shocking 615 basis point spread blowout (A2/P2 spread) of late 2008, they have not been successful in preventing an overall contraction in the CP market.

The Federal Reserve calculates and published the total amount of CP outstanding every week and as of late March commercial paper continues to slump on a monthly basis while still rising 7.59% on a year-over-year basis to $1002.20 billion, a level that is still substantially lower than even the worst periods of the last two recessions.

Open House Alert - 115 Raspberry

Look at this gorgeous room!  The fireplace, the couch....the view out the opposite windows is of a private back yard.  The flooring is new, an update.  I love the color they chose for the wall - it works so well with the molding.  And this family room is the extension from the kitchen, so you can watch TV, gather round the fireplace, and still tell the cook what to make!

The home will be open this Sunday from 1:00 to 3:00.  The MLS# is S285298.  It is truly a wonderful home, and we just dropped the price to $309,000.

  •  5 bedrooms (one currently used as the media room)
  •  2.5 baths with a spectacular shower in the master
  •  dining room and living room (that could be converted to an office)
  •  finished basement that contains a bar, an office, and a kids' playroom. 

Scenic Meadows is a fully developed community high above 695 and the Village of Camillus.  The homes were built by Ryan and Zeck, and are now going through updates.  This one has the view of the valley, almost an acre of land, and a sideload garage.  The owners have done a wonderful job of getting it ready for sale.  If you are considering putting your house on the market, you should see this one.

Come one, come all!  There will be refreshments of some kind and hopefully a lot of people browsing.  I also plan an incentive - if you have an accepted offer by May 1st, then I will give you a $250 gift card to Pier One.

See you Sunday!

Monday, April 8, 2013

SNAP Food Stamp Participation: January 2013

As a logical consequence of the prolonged economic downturn, participation in the federal food stamp program is continuing to rise.

In fact, household participation has been climbing so steadily that it has dwarfed the last peak (which looks like a minor blip by comparison) set as a result of the immediate fallout following hurricane Katrina.

The latest data released by the Department of Agriculture indicated that in January, a whopping 514,518 individual recipients were removed from the food stamps program with the current total still increasing 1.78% on a year-over-year basis.

Individuals receiving food stamp benefits declined to 47.27 million which, as a ratio of the overall civilian non-institutional population, increased 0.79% since January 2012 to now stand at a whopping 19.32% of the population.

Households receiving food stamps benefits increased by 23,322 to 23.08 million households with the current total rising 4.05% above the level seen a year earlier

As participation continues to swell, so too has the total nominal benefit cost climbing 2.85% on a year-over-year basis to $6.32 billion for the month.