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!
Friday, October 12, 2012
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.
Thursday, October 4, 2012
Is Inventory a Problem?
Answer to the title of the post: YES, it is a problem right now, so I think it's time to share some more information on where exactly we stand with the current market conditions. Are houses selling? Are people buying? Buy or Rent? All of these are good questions are deserve some answers so here we go! Home prices are definitely on the rise but the only question is how fast are they going to rise and how high will they go. I am not a fortune teller so I do not have those exact answers for you, however I can say that prices are moving up. The fact of rising home prices is causing a problem in many markets around the country. There was such a collapse in 2006 that mostly everyone lost value or equity with the dramatic drop in home prices. Therefore, a lot of people's mentality right now is to sit and wait it out and hope for prices to come back so they do not have to take a loss. These "would-be" sellers need to overcome their negative equity which statistics show is the main issue when deciding to list the home or not. Nearly 10.8 million home owners were underwater at the end of june. A lot of owners are even moving and buying a new home without selling their previous home, instead they are renting it in order to earn some income while waiting on the increase in home prices. "Many [would-be sellers] are waiting for prices to increase more before they can sell, and some sellers are keeping their current homes as a rental investment and buying without selling," Tom Avent, a broker-owner at Tom Avent Real Estate in Fresno, Calif., told Inman News.
This is causing the inventory in many areas to be very low, especially QUALITY inventory. What I am seeing happen now with the market is unlike anything seen in a long time. Now you might say, well this guy is young, how much could he actually have seen happen in his career, and that is a valid point. However, I make it a point to do my research everyday, not only on current conditions, but past trends and analysis. Not only that, but I am privy to much more information due to the quality of agents that work here in the office with me. With that said, I want to share not only my thoughts, but the thoughts and opinions of seasoned agents as well. A crash like the one we went through is unlike anything seen in the housing market before. That is why we are experiencing new trends, statistics, reactions, feelings, etc. As I said before, sellers are very reluctant to put their house for sale due to the losses they will have to take, resulting in very low inventory. This low inventory is holding back the market in a big way, because for the first time that many can remember, a lot of buyers are giving agents their criteria for a new home and advising them to keep an eye out for anything that may come on the market because there currently is low quality inventory. I have seen over the past few weeks that if a home of good quality comes on the market it will sell in no time.
Redfin conducted a survey of 816 home owners or "would be" sellers and eight out of ten believe that if they wait another year or two they will receive a good amount more for their home than if they were to sell right now. Only a measly thirteen percent believe now is a good time to sell. Contrary to popular belief, it actually is a seller's market in many areas right now. "Many sellers are still not aware of how strong our market is," Charles Roberts, co-owner of Your Castle Real Estate who serves as a director on the Denver Board of REALTORS®, told Inman News. "They still think it's a bad market to sell. Our job is to inform them about the market and explain to them that with a rising market, it has become a strong seller's market and to walk through their options." “Now it doesn't mean prices are skyrocketing like past cycles, but with the chance of multiple offers, it makes the process more appealing,” Lopez told Inman News.
Redfin conducted a survey of 816 home owners or "would be" sellers and eight out of ten believe that if they wait another year or two they will receive a good amount more for their home than if they were to sell right now. Only a measly thirteen percent believe now is a good time to sell. Contrary to popular belief, it actually is a seller's market in many areas right now. "Many sellers are still not aware of how strong our market is," Charles Roberts, co-owner of Your Castle Real Estate who serves as a director on the Denver Board of REALTORS®, told Inman News. "They still think it's a bad market to sell. Our job is to inform them about the market and explain to them that with a rising market, it has become a strong seller's market and to walk through their options." “Now it doesn't mean prices are skyrocketing like past cycles, but with the chance of multiple offers, it makes the process more appealing,” Lopez told Inman News.
Now that we are seeing extremely good conditions to buy, we are seeing buyers all over who want to purchase a home. This means more bids on properties and possibly even a bidding war which could earn the seller's some extra profit on the sale. However, the people who are on the fence about selling should really move forward and consult a real estate agent (like myself!) in order to get an informed opinion on what their next move should be, or more specifically WHEN their next move should be.
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