This information is based off of the reporting in the "Beige Book", therefore I will quickly describe what the "Beige Book" is for those of you who are not sure. The "Beige Book" is an alternative term for the report more formally known as the Summary of Commentary on Economic Conditions issued by the Federal Reseve Board and is issued eight times throughout the year. How did this report become a standard for reviewing economic conditions? Well it just so happens that I got that information for you as well! The date was 1985, and former Dow Jones reporter Paul Cox requested to see the report. He was granted permission to see it, which in turn forced all competing reporters to request access the following month. Next thing you know, almost 30 years later, it is a staple for reviewing the current economic state.
Now that you understand the credibility of the source at hand, we can discuss the findings of the most recent report in regards to real estate. Ten of the twelve reviewed districts posted moderate economic growth from August into September. However, the bright spot in this recovery, according to the Fed Reserve , is Real Estate. The report states that a few issues are restraining hiring which include the uncertainty of possible tax increases, a very sluggish job market, and most of all the upcoming Presidential election. The meaning of the statement "bright spot" when referring to Real Estate is because the housing market "showed widespread improvement". All twelve districts posted higher existing home sales and some areas even showed "substantial" growth. The Beige Book also declared a "robust" multifamily market particularly in the cities of Boston, New York, Atlanta, and Chicago.
This is more good news for the housing market and the overall views on the market continue to show us nothing but positive feedback and growth.
Friday, October 12, 2012
Survey Shows Increasingly Positive Views On Housing
Fannie Mae's September national housing survey, which is conducted by interviewing 1,000 Americans, is continuing to portray a more positive public outlook on housing. According to this survey, the views have remained positive for eleven straight months now. Also, the amount of people who are expecting home prices to fall has reached 11%. That number of 11% is an all time low since the survey was initiated in 2010. The expectations of the respondents are for home prices to INCREASE 1.5 percent over the next year.
“Consumers are showing increasing faith in the nascent housing recovery,” says Doug Duncan, Fannie Mae’s chief economist.
“Consumers are showing increasing faith in the nascent housing recovery,” says Doug Duncan, Fannie Mae’s chief economist.
Next question, is now a good time to sell? Buy? According to the survey, approximately 20% say yes, now is a good time to sell, which is a record high for the history of this survey. As for the question of is now a good time to buy, a much higher 69% say they believe now is a very good time to buy. On another note, not only is their an increasingly positive view for housing, but also for the economy overall. 33% said the economy was on the right track last month, but this month that number jumped to 41%. Although that is a good sign, there are still 53% saying the economy is on the wrong track. Obviously, something needs to be done in terms of fixing the economy, which has been a huge topic of discussion during the debates, and will continue to be on Tuesday with the second Presidential Debate.
Source: realtormag
VP Debate...Thoughts?
Good Morning! I hope everyone is staying warm. To all of those who watched the debate last night, I would love to know what you thought???? Please comment if you could and tell a little about your opinions and how you thought it went! I believed it was a good debate, but hampered with the seemingly condescending attitude of VP Biden. Personally, being one of the younger Americans out there, I was really turned off by VP Biden's attitude and body language towards VP candidate Ryan. Overall it was a very close debate, each side made some very significant points, but the question is, who was telling the truth and who was making up their own truth. My biggest concern right now is with the future economic state of this great country of ours because from what I can see, my generation (genY) is going to be left with an insurmountable debt unless some changes are made. Can one of these teams make the necessary changes?
Please stop by and leave your thoughts if you would like, I am really interested to hear some opinions!
Please stop by and leave your thoughts if you would like, I am really interested to hear some opinions!
Tuesday, October 9, 2012
Unemployment Rate: The Reality
Alright so this has been bothering me ever since the Obama administration came out with their unfathomable "7.8%" unemployment rate. No president has ever been re-elected with an unemployment rate above 8% so the administration has done a very good job to crunch the numbers and make it come to something below the 8% threshold. HOWEVER!! lets take a look at the reality of this situation. Where the hell are all these new jobs that are making the unemployment rate decrease this much? Im not seeing any difference out there, and im sure most of you are not seeing it either, because it is not there. The BLS (Bereu of Labor Statistics) came out in August with an 8.1% unemployment rate, and now for September it dropped a drastic 0.3%?
Quickly, let me explain how the BLS calculates the unemployment rate. First, you figure out the total number of unemployed people out there, then the total number of employed people out there. Then, divide the number of unemployed by the sum of all employed and unemployed. If it was written as a math problem it would look like this:
E= employed
UN=unemployed
UN/(UN+E)=?
Now, lets look at some facts because, unless there was a very significant change (which there has not been) the country's past trends should be staying relatively on track. For the recent 0.3% drop from August to September we saw a drop of 456,000 in the number of unemployed persons in the workforce. This is the largest september one month drop in the history of the BLS data going all the way back to 1948. Not only that, but we also saw a dramatic increase in the number of employed persons by 873,000; another [record setting] largest increase for a September one month change in the history of BLS data going back to 1948....hmmm....last time I checked we are going through the worst recession recovery since the Great Depression, yet we are seeing numbers that have not even been seen during our strongest economy conditions.
Now let's compare these numbers to the averages of the history of the BLS data. According to the facts, based on a non-seasonally adjusted basis a typical September sees a decrease in the number of employed due to the end of temporary summer seasonal hires. The BLS reports show a decrease anywhere from 100,000 to over a million depending on whether the country is going through a recession or not. There is VERY RARELY an increase in the number of employed going into September (an increase has only happened 6 times since 1948 and 4 of the 6 times the increase was under 100,000). HOWEVER, this September shows an increase of 775,000 employed persons. No, that is not a typo, the number is seven hundred and seventy five thousand. That number is nearly five times greater than the previous high. Again, according to the BLS data on a non-seasonally adjusted basis, the number of unemployed dropped by the largest amount since 1948. Seem a little weird???? Well it gets even weirder! The non-seasonally adjusted part-time workers data from the BLS has only shown an increase in part-time workers a total of 3 times. Just like everything else we have seen so far, this number too has strayed far from the usual, seeing a tremendous increase.
So, according to these numbers, we have seen the most incredibly dramatic positive swing in our workforce since 1948, yet the TRUE AND ACTUAL condition of our economy shows nothing to support these crazy numbers. Is our president fixing the numbers to get votes? There is no real proof to say that, but come on...it doesn't take a rocket scientist to see this.
PLUS, the published unemployment rate does not even account for all of the Americans who stopped looking for jobs because their searches found no results. Realistically, the rate is more around 12%, but that would look bad to voters... On top of all that, what about college grads? I myself am a recent college graduate, graduating from Seton Hall University's Stillman School of Business. I had a very hard time finding a job as well as most of my fellow students. I graduated in May 2011 and I still know plenty of classmates that cannot find any jobs. An astonishing 50% of last years college grads are currently out of work.
Put all the pieces together and what conclusion do you come to?
source:seekingalpha
Quickly, let me explain how the BLS calculates the unemployment rate. First, you figure out the total number of unemployed people out there, then the total number of employed people out there. Then, divide the number of unemployed by the sum of all employed and unemployed. If it was written as a math problem it would look like this:
E= employed
UN=unemployed
UN/(UN+E)=?
Now, lets look at some facts because, unless there was a very significant change (which there has not been) the country's past trends should be staying relatively on track. For the recent 0.3% drop from August to September we saw a drop of 456,000 in the number of unemployed persons in the workforce. This is the largest september one month drop in the history of the BLS data going all the way back to 1948. Not only that, but we also saw a dramatic increase in the number of employed persons by 873,000; another [record setting] largest increase for a September one month change in the history of BLS data going back to 1948....hmmm....last time I checked we are going through the worst recession recovery since the Great Depression, yet we are seeing numbers that have not even been seen during our strongest economy conditions.
Now let's compare these numbers to the averages of the history of the BLS data. According to the facts, based on a non-seasonally adjusted basis a typical September sees a decrease in the number of employed due to the end of temporary summer seasonal hires. The BLS reports show a decrease anywhere from 100,000 to over a million depending on whether the country is going through a recession or not. There is VERY RARELY an increase in the number of employed going into September (an increase has only happened 6 times since 1948 and 4 of the 6 times the increase was under 100,000). HOWEVER, this September shows an increase of 775,000 employed persons. No, that is not a typo, the number is seven hundred and seventy five thousand. That number is nearly five times greater than the previous high. Again, according to the BLS data on a non-seasonally adjusted basis, the number of unemployed dropped by the largest amount since 1948. Seem a little weird???? Well it gets even weirder! The non-seasonally adjusted part-time workers data from the BLS has only shown an increase in part-time workers a total of 3 times. Just like everything else we have seen so far, this number too has strayed far from the usual, seeing a tremendous increase.
So, according to these numbers, we have seen the most incredibly dramatic positive swing in our workforce since 1948, yet the TRUE AND ACTUAL condition of our economy shows nothing to support these crazy numbers. Is our president fixing the numbers to get votes? There is no real proof to say that, but come on...it doesn't take a rocket scientist to see this.
PLUS, the published unemployment rate does not even account for all of the Americans who stopped looking for jobs because their searches found no results. Realistically, the rate is more around 12%, but that would look bad to voters... On top of all that, what about college grads? I myself am a recent college graduate, graduating from Seton Hall University's Stillman School of Business. I had a very hard time finding a job as well as most of my fellow students. I graduated in May 2011 and I still know plenty of classmates that cannot find any jobs. An astonishing 50% of last years college grads are currently out of work.
Put all the pieces together and what conclusion do you come to?
source:seekingalpha
Making Money With Your Home
Hey everyone, seems the nice weather is finally gone and now comes the cold.
On a brighter note, however, if you are a home owner you have a lot to be happy about. The equity in your home is beginning to build up. Now let me explain what home equity means really quick for those of you who are unsure. Home equity is the value of the interest held on a piece of property. For example, if you paid $300,000 for a home, your interest or equity in that property is $300,000. Now if that property increases its value over the next year to $315,000 then your interest (equity) in the property is now $315,000. Simple enough, right? Well that is exactly what is happening now, home owners interest in their property is beginning to increase which means these home owners are gaining money. Home values are increasing steadily and its beginning to have a real effect. Home equity has reached its highest point since the burst of the housing bubble and it has increased by $860 billion since last year. Due to this increase, approximately 1.3 million families have been relieved from being "underwater" or owing more money for their mortgage than their house was actually worth. The actual amount of home owners underwater is now 10.8 million, which might get the reaction WHOA thats a lot, and your right, it definitely is. However, compared to last year's number of 12.1 million, we saw an 11% decrease from '11 to '12; it is obvious that we are making strides in the right direction. This really is great news for the housing market but also for the economy in general. More equity in the hands of the people is always a good thing. To continue with the facts, August put forth the highest amount of existing home sales in more than two years. “Our housing market is showing important signs of recovery—with home owner equity at a four-year high and summer sales of existing homes at the strongest pace in two years,” says Erika Poethig, acting assistant secretary at the U.S. Department of Housing and Urban Development.
On a brighter note, however, if you are a home owner you have a lot to be happy about. The equity in your home is beginning to build up. Now let me explain what home equity means really quick for those of you who are unsure. Home equity is the value of the interest held on a piece of property. For example, if you paid $300,000 for a home, your interest or equity in that property is $300,000. Now if that property increases its value over the next year to $315,000 then your interest (equity) in the property is now $315,000. Simple enough, right? Well that is exactly what is happening now, home owners interest in their property is beginning to increase which means these home owners are gaining money. Home values are increasing steadily and its beginning to have a real effect. Home equity has reached its highest point since the burst of the housing bubble and it has increased by $860 billion since last year. Due to this increase, approximately 1.3 million families have been relieved from being "underwater" or owing more money for their mortgage than their house was actually worth. The actual amount of home owners underwater is now 10.8 million, which might get the reaction WHOA thats a lot, and your right, it definitely is. However, compared to last year's number of 12.1 million, we saw an 11% decrease from '11 to '12; it is obvious that we are making strides in the right direction. This really is great news for the housing market but also for the economy in general. More equity in the hands of the people is always a good thing. To continue with the facts, August put forth the highest amount of existing home sales in more than two years. “Our housing market is showing important signs of recovery—with home owner equity at a four-year high and summer sales of existing homes at the strongest pace in two years,” says Erika Poethig, acting assistant secretary at the U.S. Department of Housing and Urban Development.
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