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Economic News

Home Resales Rise More Than Expected

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Home Resales Rose

American home resales rose in September more than forecasted- according to NAR, purchases of existing homes jumped 5.5 percent last month to a 5.18 million annual pace, the highest level in the last 12 months while the median national price dropped 9 percent.

Sales rose 1.4 percent compared with a year earlier, the first year-over-year increase since November 2005. Resales totaled 5.65 million in 2007.

Today’s figures compare with the 4.86 million level reached in June, the lowest in a decade and 33 percent down from the record reached in September 2005.

Foreclosures account for 35 to 40 percent of last month’s sales and according to Lawrence Yun, roughly 80% were primary residences, higher than the average 75% signaling that investors are NOT the primary reason for the jump.

Improved Sales- Temporary?

With the economy in an unpredictable state, I’m sure we’ll see many more reports of exceeding or declining from forecasted numbers but meeting numbers won’t likely make news.

Sales are doing better nationally but is that temporary? Is credit STILL tightening? Are banks nervous that foreclosures will depress values? Will they withhold financing because of their concerns making lower prices short lived?

“In terms of sales, I think we have bottomed out,” Yun said in a press conference. “The first step to housing-market stabilization is rising home sales. Hopefully, this trend can continue.” Yun also said, “inventories need to continue dropping in order to stabilize prices, and that will take more time.”

New Home Construction

But what about new homes? New home construction accounts for 10% of national home sales and many builders are reporting lower than expected sales for the month while others are putting entire projects on hold.

“The housing downswing is really not exactly even nearing a bottom at this point,” David Seiders, chief economist at the National Association of Homebuilders said. “The core problem in the economy is still housing, and house prices are decimating the financial markets.”

What About YOUR Market?

Most of these numbers are absolutely NOT a depiction of Austin, are they close to the mark where you practice real estate? What are things like where you are?

sources: businessweek.com, NAR
photo source: flickr

Lani is the Chief Operating Officer at The American Genius - she has co-authored a book, co-founded BASHH and Austin Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

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17 Comments

17 Comments

  1. Pam Buda

    October 24, 2008 at 12:48 pm

    Hi Lani–our area (Sonoma County in Northern California) has seen an exaggerated version of the National Trend, with pending sales sharply up beginning in February and rising consistently since then–with the highest sales rate in well over 24 months beginning this summer and continuing through September.

    Median prices are down dramatically at the same time, fueling a strong buying spree in our entry level market (under $500K or really under 400K) with both first time buyers and investors participating. The rate of sales is accelerating and the number of new listings at the low end are declining.

    Prices at this end of the market are in the same range as 2002-2003 in some cases. Some lenders estimate that locally in September we have worked through about half the sub-prime loan inventory. That remains to be seen.

    Sonoma County is a highly desirable area about 1 hour north of San Francisco with relatively strong employment and a diverse economy. Many Bay Area residents move here for more affordable housing or to retire for a taste of the wine country lifestyle. As such, we more closely mirror real estate trends in the prime Bay Area markets such as SF, Marin County, the peninsula and the East Bay. At the same time, our upper level market which has maintained some strength, appears to be slowing due to the increased difficulty and cost of jumbo loans.

  2. Teresa Boardman

    October 24, 2008 at 3:15 pm

    Home sales went up here in Ramsey county MN too. We seem to be have a clearance sale with a lot of the bank owned and now steeply discounted homes being purchased. There are incredible bargains out there but some buyers still think homes are like stock and they are afraid to buy if there is any chance they will go down. As the bottom gets sold off the total inventory is going down. I predict in a few months the market will be more balanced and prices will be stable. I hate to ring the bell but I am inclined to think we have hit bottom here. Housing is not a stand alone thing and is affected by the rest of the economy. We are in a nation wide ressecion so I guess it will all depends upon how long it lasts and how deep it goes.

  3. Tom Vanderwell

    October 24, 2008 at 4:24 pm

    I’m in West Michigan and I need to throw some stats in the other side of the spectrum.

    Currently 57% of sales are RE0 or short sales. The inventory levels have averaged 14 months. The $275k to 350k market (bread and butter homes for established families) in part of our market (Ottawa County) has a 3.2 year inventory. Vacant lots for sale are running about a 13 year inventory.

    It’s all about jobs and we are still losing them.

    Sorry, but in Michigan, the bottom isn’t even close.

    Tom

  4. Thomas Johnson

    October 24, 2008 at 4:37 pm

    These numbers are encouraging. Even though most would say the prices are no good, but until we get the banks out of the flip this house business, normal sellers will be under oversupply price pressure. At least the lenders are finally starting to liquidate their holdings, and are finally putting more short sale staff online.

  5. Tim McDonald

    October 24, 2008 at 5:53 pm

    According to Illinois Association of Realtors, September saw home sales in the Chicago area drop 6.2% compared to September 2007. Prices were down 13% to $224,000 from September 2007. In the city of Chicago, things were worse as the drop in home sales was 16%. From what I’ve read, the city still has not seen a decline in the inventory of condos, with many projects still not finished that are currently under construction. I feel prices have not seen the bottom yet, but don’t foresee them getting too much lower. Some of the more depressed areas (even before the crash) are offering great first time home buyer incentives, but the restrictions and media make it seem very difficult to obtain a mortgage.

  6. Missy Caulk

    October 24, 2008 at 8:02 pm

    Lani, in Ann Arbor our home sales were up over 2007, but prices were done. Over half of our sales were short sales or foreclosures. Our inventory is decreasing so that is the good news.

    But, my gut tells me until the foreclosure’s slow we will continue to drop in sales prices. WE need jobs in Michigan before we recover.

  7. Steve Simon

    October 25, 2008 at 3:18 pm

    West Central Florida has been absolutely killed…
    The numbers (stats) do not sufficiently tell the tale of woe that has been the norm here for quite a while.
    Foreclosures are backed up in the hopper so far that the additions to inventory is assured well into the latter half of next year.
    The discretionary income that does not exist elsewhere can almost guarantee us a poor Tourist Season. The only good things are that the slow down has thinned out the ranks of the industry, and gas is still dropping…
    We will survive read my post:
    https://www.stevesimon.us/blog/?p=333
    But it will be slow going for a good while.
    Just my thoughts:)

  8. Paula Henry

    October 25, 2008 at 7:35 pm

    Lani – Our sales were up and prices down. There is a lot of investor interest buying up bank owned, which is great for the resale market homeowners.

    It will be interesting to see how the rest of the year plays out and what Spring brings. I believe we are at the bottom, but we never had the huge icreases much of the country did and besides, we have the most affordable homes in the nation vs. our income; about 21% of our income goes toward housing – pretty amazing!

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Economic News

Boomers retirement may be the true reason behind the labor shortage

(ECONOMY) Millennials and Gen Z were quick to be blamed for the labor shortage, citing lazy work ethic- the cause could actually be Boomers retirement.

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Older man pictured in cafe with laptop nearby representing boomers retirement.

In July, we reported on the Great Resignation. With record numbers of resignations, there’s a huge labor shortage in the United States. Although there were many speculations about the reasons why, from “lazy” millennials to the number of deaths from Covid. Just recently, CNN reported that in November another 3.6 million Americans left the labor force. It’s been suggested that the younger generations don’t want to work but retiring Boomers might be the bigger culprit.

Why Boomers are leaving the labor force

CNN Business reports that 90% of the Americans who left the workplace were over 55 years old. It’s now being suggested that many of the people who have left the labor force since the beginning of the pandemic were older Americans, not Millennials or Gen Z, as we originally thought. Here are the reasons why:

  • Boomers are more concerned about catching COVID-19 than their younger counterparts, so they aren’t returning to work. Boomers are less willing to risk their health.
  • The robust real estate market has benefitted Boomers, who have more equity in their homes. Boomers have more options on the table than just returning to work.
  • Employers aren’t creating or posting jobs that lure people out of retirement or those near retirement age.

As Boomers retire, how does this impact the overall labor economy?

According to CNN Business, there are signs that the labor shortage is abating. Employers are starting to see record number of applicants to most posted jobs. FedEx, for example, just got 111,000 applications in one week, the highest it has ever recorded. The U.S. Bureau of Labor Statistics projects that the pandemic-induced increase in retirement is only temporary. People who retired due to the risk of the pandemic will return to work as new strategies emerge to reduce the risk to their health. With new varients popping up, we will have to keep an eye on how the trend ultimately plays out.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?

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NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<

#CarsonHUD

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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.

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young executives

job openings

Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

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The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.

#JobOpenings

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