The Census Bureau reports how many new homes were sold in October and the average price. Economists believe new homes were sold at an annual rate of 753,000 units last month, a 21 percent decline from October 2006. On Wednesday, the National Association of Realtors reported sales of existing homes slipped more than 20 percent last month versus October last year.
Jonah’s Thoughts:
The bad news: we are not going to sell over 7 million homes this year.
The good news: we going to sell just under 5 million homes.
Thursday, November 29, 2007
Existing-Home Sales Drop Further
Sales of existing homes fell for the eight consecutive months in October, with median prices falling a record amount. The National Association of Realtors reported that sales of existing single-family homes and condominiums dropped 1.2 percent last month to a seasonally adjusted annual rate of 4.97 million units. The median sale price declined to $207,800 last month, a drop of 5.1 percent from a year earlier, the biggest year-over-year price decline on record. Analysts blamed the credit crunch that hit in August.
Jonah’s Thoughts:
The bad news: the decline is predictable and not over yet.
The good news: the overloaded inventory is being reduced, housing starts continue to be restricted and price reductions though hard on the home seller, are all good news as we look for the light at the end of the proverbial tunnel.
Jonah’s Thoughts:
The bad news: the decline is predictable and not over yet.
The good news: the overloaded inventory is being reduced, housing starts continue to be restricted and price reductions though hard on the home seller, are all good news as we look for the light at the end of the proverbial tunnel.
Tuesday, November 27, 2007
Jobless Rates Listed as up in 94 counties
A state agency has reported that unemployment rates increased in 94 Kentucky counties between October 2006 and October 2007. The Kentucky Office of Employment and Training reported unemployment rates dropped in 18 counties and remained the same in eight counties. The highest jobless rate was 10.2 percent in Jackson County. Fayette and Warren counties recorded the lowest jobless rates at 3.7 percent each. In Kentucky, unemployment statistics are based in estimates and are complied to measure trends rather than actually to count people working. They do not include unemployed Kentuckians who have not looked for employment within the past four weeks.
Jonah’s Thoughts:
Fayette, Scott, Madison, and Jessamine Counties are all seeing new growth.
Lexington Herald-Leader, November 27, 2007
Jonah’s Thoughts:
Fayette, Scott, Madison, and Jessamine Counties are all seeing new growth.
Lexington Herald-Leader, November 27, 2007
Housing crisis cuts into city coffers
U.S. CONFERENCE OF MAYORS' REPORT SOUNDS ALARM
WASHINGTON --
The deepening housing crisis will cut economic growth by more than 25 percent in 143 U.S. metropolitan areas next year and by more than a third in 65 of those, according to a new forecast for the U.S. Conference of Mayors.
The report, to be released today and prepared by financial forecaster Global Insight, warns of cascading problems caused by falling home prices, an expected 1.4 million foreclosures and the pending reset of millions of adjustable-rate mortgages.
The cities with the biggest-percentage projected losses to their gross metropolitan products are Myrtle Beach, S.C., the California cities of Merced, Madera and Napa, and Sarasota-Bradenton, Fla.
Jonah’s Thoughts:
Don’t look for our property taxes to be lowered even though property value is sliding because of lower sales prices.
By Kevin G. Hall, MCCLATCHY NEWSPAPERS
WASHINGTON --
The deepening housing crisis will cut economic growth by more than 25 percent in 143 U.S. metropolitan areas next year and by more than a third in 65 of those, according to a new forecast for the U.S. Conference of Mayors.
The report, to be released today and prepared by financial forecaster Global Insight, warns of cascading problems caused by falling home prices, an expected 1.4 million foreclosures and the pending reset of millions of adjustable-rate mortgages.
The cities with the biggest-percentage projected losses to their gross metropolitan products are Myrtle Beach, S.C., the California cities of Merced, Madera and Napa, and Sarasota-Bradenton, Fla.
Jonah’s Thoughts:
Don’t look for our property taxes to be lowered even though property value is sliding because of lower sales prices.
By Kevin G. Hall, MCCLATCHY NEWSPAPERS
Single-Family home building at 16-year low
from Lexington Herald-Leader 11/21/07
The Commerce Department reported yesterday that total housing construction rose 3 percent in October to a seasonally adjusted rate of 1.229 million units. But all the strength occurred in a hefty rebound in apartment construction, which is extremely volatile. The bigger single-family sector actually fell 7.3 percent to an annual rate of 884,000 units, the slowest pace since October 1991. Applications for building permits fell for a fifth straight month. The rebound in overall construction in October reflected gains in all regions of the country except the South, where building activity fell 4.6 percent. Construction rose 21.1 percent in the Midwest, 8.5 percent in the Northeast and 5.8 percent in the West.
The Commerce Department reported yesterday that total housing construction rose 3 percent in October to a seasonally adjusted rate of 1.229 million units. But all the strength occurred in a hefty rebound in apartment construction, which is extremely volatile. The bigger single-family sector actually fell 7.3 percent to an annual rate of 884,000 units, the slowest pace since October 1991. Applications for building permits fell for a fifth straight month. The rebound in overall construction in October reflected gains in all regions of the country except the South, where building activity fell 4.6 percent. Construction rose 21.1 percent in the Midwest, 8.5 percent in the Northeast and 5.8 percent in the West.
Monday, November 19, 2007
It's not as if we got dumb all of a sudden
By Sue Kirchhoff, USA TODAY
WASHINGTON — More signs of a slowdown emerged Thursday, with a major retailer announcing lower-than-expected sales and the housing slump deepening. At the same time, spiking gasoline prices pushed consumer inflation higher in October.
The Federal Reserve has predicted that the economy's growth will slow, but not freeze up, through the end of the year and into 2008. Business and consumers face tighter credit markets, rising energy costs and dropping home sales and prices.
J.C. Penney CEO Myron Ullman III told investors during a conference call the slowdown reflected broader economic factors. One area of decline was home furnishings, tied to the slowdown in housing.
"It's hard to sell window coverings to homes that aren't being built," Ullman said. "It's not as if we got dumb all of a sudden."
WASHINGTON — More signs of a slowdown emerged Thursday, with a major retailer announcing lower-than-expected sales and the housing slump deepening. At the same time, spiking gasoline prices pushed consumer inflation higher in October.
The Federal Reserve has predicted that the economy's growth will slow, but not freeze up, through the end of the year and into 2008. Business and consumers face tighter credit markets, rising energy costs and dropping home sales and prices.
J.C. Penney CEO Myron Ullman III told investors during a conference call the slowdown reflected broader economic factors. One area of decline was home furnishings, tied to the slowdown in housing.
"It's hard to sell window coverings to homes that aren't being built," Ullman said. "It's not as if we got dumb all of a sudden."
House bill targets lenders
from USA Today
Friday, November 16, 2007
The U.S. House on Thursday voted to crack down on mortgage lenders by enacting federal licensing, making them responsible for knowing whether borrowers can repay loans and fining them for steering people to higher-priced subprime loans when other financing is available. The bill now goes to the Senate, where a similar bill has been stalled.
Friday, November 16, 2007
The U.S. House on Thursday voted to crack down on mortgage lenders by enacting federal licensing, making them responsible for knowing whether borrowers can repay loans and fining them for steering people to higher-priced subprime loans when other financing is available. The bill now goes to the Senate, where a similar bill has been stalled.
Monday, November 12, 2007
How low can they go? Asks Fortune Magazine’s Shawn Tully
Tully’s’ talking points
“Now that the gilded forecasts have proven spectacularly wrong, homeowners don’t know what to think about the real estate’s future. The dizzying rise sure didn’t make sense. And the sudden slump doesn’t seem any more logical.”
“According to our calculations, prices in most markets will fall by double digits over the next five years.”
“Prices have already started on the painful path back to rational levels.”
“Between 2000 and early 2005 average mortgage rates, adjusted for inflation, declined from 5.5% to less than 4% But the tailwind from low rates is now over. The cheap and easy money is gone, but the inflated prices it created are still here. No other factor was as important in driving the price-to-rent ratio to its current, unsustainable heights.”
Toll Brothers (Robert Toll), three reasons for the enormous overhang of unsold, unoccupied homes are…
1) Vacant homes in the hands of builders.
2) Older homes that speculators are trying to dump
3) Foreclosed properties that banks are desperate to shed.
Jonah’s Thoughts:
The big question is… have our buyers dissipated or just gone into hiding.
The Lexington area is only expected to fall by single digits.
Low interest rates are here to stay for the foreseeable future.
“Now that the gilded forecasts have proven spectacularly wrong, homeowners don’t know what to think about the real estate’s future. The dizzying rise sure didn’t make sense. And the sudden slump doesn’t seem any more logical.”
“According to our calculations, prices in most markets will fall by double digits over the next five years.”
“Prices have already started on the painful path back to rational levels.”
“Between 2000 and early 2005 average mortgage rates, adjusted for inflation, declined from 5.5% to less than 4% But the tailwind from low rates is now over. The cheap and easy money is gone, but the inflated prices it created are still here. No other factor was as important in driving the price-to-rent ratio to its current, unsustainable heights.”
Toll Brothers (Robert Toll), three reasons for the enormous overhang of unsold, unoccupied homes are…
1) Vacant homes in the hands of builders.
2) Older homes that speculators are trying to dump
3) Foreclosed properties that banks are desperate to shed.
Jonah’s Thoughts:
The big question is… have our buyers dissipated or just gone into hiding.
The Lexington area is only expected to fall by single digits.
Low interest rates are here to stay for the foreseeable future.
Thursday, November 8, 2007
Global Credit Crunch
How defaults on risky mortgages wreaked havoc around the world.
From 2001 through mid-2006, single-family home prices surged 84%, according to the S&P/Case Shiller U.S. National Home Price Index. Lenders granted mortgagees with risky structures to poor-credit or “subprime” borrowers, thinking rising home values would offset the risks. Homebuilders built new homes at a record rate. Home loans were resold and packaged into mortgage-backed securities, which were brought by hedge funds and other investors. This generated capital for lenders to make more loans. Then, the housing boom ended.
Michael J. Martinez, Kristen Girard
Jonah's Thoughts:
“This is a great summary if what happened to our credit markets.”
From 2001 through mid-2006, single-family home prices surged 84%, according to the S&P/Case Shiller U.S. National Home Price Index. Lenders granted mortgagees with risky structures to poor-credit or “subprime” borrowers, thinking rising home values would offset the risks. Homebuilders built new homes at a record rate. Home loans were resold and packaged into mortgage-backed securities, which were brought by hedge funds and other investors. This generated capital for lenders to make more loans. Then, the housing boom ended.
Michael J. Martinez, Kristen Girard
Jonah's Thoughts:
“This is a great summary if what happened to our credit markets.”
Monday, November 5, 2007
Mortgage Banker's Report
Bankers expect 18% decline in mortgage originations in '08.
"Home sales, prices not expected to rebound until late next year," says MBA Chief Economist Doug Duncan
Duncan expects the pace of home sales to remain below 2007 levels until late next year, and said prices could continue to decline beyond that before flattening out in 2009. After adjusting for inflation, Duncan said nine months before investors in such securities regain their confidence , he said.
"Home sales, prices not expected to rebound until late next year," says MBA Chief Economist Doug Duncan
Duncan expects the pace of home sales to remain below 2007 levels until late next year, and said prices could continue to decline beyond that before flattening out in 2009. After adjusting for inflation, Duncan said nine months before investors in such securities regain their confidence , he said.
Is buying a home today a good investment?
Jonah's Thought, "This is one good honest article about homeownership in today's market."
By Dian Hymer Inman News
Answer depends on whether goals are short- or long-term
Up until the recent slowdown, homeowners in many parts of the country saw the value of their homes rise rapidly. Home prices, in many areas, seemed to move in just one direction: up.
A combination of record-low interest rates and rapid price appreciation turned many homeowners into serial refinancers. When interest rates dropped, one mortgage was exchanged for another, sometimes several times within one year.
As home values rose, cash-out refinances allowed homeowners to pull equity out of their homes to remodel, send children to college, take vacations and buy new cars. It was good for the economy while wiping out billions of dollars of homeowner equity.
Tapping into home equity seemed like a great idea until the housing market softened. Now there are millions of homeowners around the country who can't sell their home for enough to pay off the loans secured against the property.
HOUSE HUNTING TIP: Buying a home is still a good investment if you can afford it, if you are ready to put down roots in a community, and if you want to invest in your personal happiness. Profit potential shouldn't be your only reason for buying a home, even though in most cases your home will appreciate in value if you maintain it and if you own it long enough.
The housing market, like any economic market, is cyclical. There are periods of robust activity followed by periods of sluggishness. Prices can go down as well as up. Now that the market has softened in most areas, it's time to look at owning your home as a way to gain control over your personal domain -- not as a source of quick cash.
In the areas that were previously hot, we are unlikely to see such significant home-price appreciation in the near future. So, if you're considering buying in one of these areas, think in terms of buying for the long term. If your future is uncertain, it might make more sense to rent.
Some niche markets in South Carolina, Idaho, Washington, Texas and Utah are experiencing double-digit home-price appreciation while the country on a whole is suffering a slowdown. If you are buying in such a market, take a lesson from the numerous homeowners who bought using risky mortgages and extinguished their equity through successive refinances.
Pay careful attention to how you finance your home purchase. The cheapest loan possible may be not be the best loan if it requires you to refinance or sell within the next few years. If the market slows and you are no longer earning appreciation on your home, refinancing could be a problem. If the market is soft then, you could have difficulty selling.
One of the best investment strategies is to buy when the market is soft, not when it's racing forward perhaps toward a peak. It's also a time when you'll find the least competition from other buyers, most of whom will wait to buy until the market has already turned.
Don't forget to consider the tax advantages of home ownership when considering whether home ownership makes sense for you. Generally, property taxes and interest paid on mortgages up to $1 million on your primary residence can be deducted for income-tax purposes. Restrictions apply, so consult your tax adviser before making a move.
The tax advantage of home ownership should not be your sole reason for buying. Owning your own home is a big commitment financially as well as in terms of the time and energy you will spend maintaining and improving your property.
THE CLOSING: In some countries, such as Australia, there is no tax break for owning a home. Nevertheless, people still buy houses there.
Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.
Friday, November 2, 2007
NAR's rosey outlook
Dr. Lawrence Yun, NAR Senior Economist spoke today to the Lexington Bluegrass Association of Realtors.
Jonah’s thoughts “NAR still holds to the philosophy that; because of the limited inflation, good job market numbers and mid-America growth numbers, we should expect the market to up-click starting this spring.
I, however, believe that the turn around is further off, not starting till November 2008.”
See Dr. Yun’s attached power point at this website http://alpaha.googlepages.com/home.
Jonah’s thoughts “NAR still holds to the philosophy that; because of the limited inflation, good job market numbers and mid-America growth numbers, we should expect the market to up-click starting this spring.
I, however, believe that the turn around is further off, not starting till November 2008.”
See Dr. Yun’s attached power point at this website http://alpaha.googlepages.com/home.
Mortgage Rates Drop across the Board
Rates on 30-year mortgages fell to the lowest level in five months this week. Freddie Mac, the mortgage company, reported yesterday that 30-year, fixed-rate mortgages dipped to 6.26 percent this week.
Jonah’s Thoughts:
“Four things have to decrese and in some cases plunge: (1) Interest Rates, (2) Current Housing Inventory, (3) New Housing Starts, (4) Home Prices. Interest rates and new housing starts have begun to fall.”
Jonah’s Thoughts:
“Four things have to decrese and in some cases plunge: (1) Interest Rates, (2) Current Housing Inventory, (3) New Housing Starts, (4) Home Prices. Interest rates and new housing starts have begun to fall.”
Foreclosures up 30% in U.S., 3.5% in Kentucky
By Jim Jordan
Lexington Herald Leader
Kentucky foreclosures remain well below the national average. The state was ranked 36th by RealtyTrac for the third quarter.
Jonah’s Thoughts:
“Kentucky consistently reflects the national real estate numbers and outlook, but on a less severe downturn.”
To read the whole article:
http://www.kentucky.com/101/story/219352.html
Lexington Herald Leader
Kentucky foreclosures remain well below the national average. The state was ranked 36th by RealtyTrac for the third quarter.
Jonah’s Thoughts:
“Kentucky consistently reflects the national real estate numbers and outlook, but on a less severe downturn.”
To read the whole article:
http://www.kentucky.com/101/story/219352.html
HOUSING ECONOMISTS EXPECT MARKET TURNAROUND TO BEGIN IN 2008
Inman News
October 26, 2007 - Though there appears to be no let-up to the current housing downswing, economists participating in the National Association of Home Builders Fall Construction Forecast Conference on Oct. 24 said they expect the industry to bottom out and to start turning around in 2008.
Jonah's Thoughts:
"I think the trough/bottom will be November 4, 2008. Then the upturn will be gradual."
To read the whole article:
http://www.nahb.org/news_details.aspx?sectionID=148&newsID=5568
October 26, 2007 - Though there appears to be no let-up to the current housing downswing, economists participating in the National Association of Home Builders Fall Construction Forecast Conference on Oct. 24 said they expect the industry to bottom out and to start turning around in 2008.
Jonah's Thoughts:
"I think the trough/bottom will be November 4, 2008. Then the upturn will be gradual."
To read the whole article:
http://www.nahb.org/news_details.aspx?sectionID=148&newsID=5568
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