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Economic News

Completed real estate transactions up 5.2% from March 2011

Interest rates are low, consumer traffic is healthy, and while existing home sales fell for the month, most indicators have improved over the last year which the NAR remains cautiously optimistic about. Regional sales and price levels differ widely.

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Existing home sales down

Existing home sales, or completed transactions, fell 2.6 percent in March, according to the National Association of Realtors (NAR), which is 5.2 percent above March 2011, and inventory levels are down 1.3 percent, which NAR calls “signs of stabilization.” The trade group continues their message of cautious optimism toward a housing recovery.

Dr. Lawrence Yun, NAR chief economist, said the recovery is in the process of settling into a higher level of home sales. “The recovery is happening though not at a breakout pace, but we have seen nine consecutive months of year-over-year sales increases.”

“Existing-home sales are moving up and down in a fairly narrow range that is well above the level of activity during the first half of last year,” Dr. Yun added. “With job growth, low interest rates, bargain home prices and an improving economy, the pent-up demand is coming to market and we expect housing to be notably better this year.”

Home prices, home sales

Although inventory levels slid slightly, the current levels remain at a 6.3 month supply at the current sales pace in March, just as in February, but NAR notes that listed inventory is 21.8 percent below March 2011 and below the record of 4.04 million in July 2007.

“We were expecting a seasonal increase in home listings, but a lack of inventory has suddenly become an issue in several markets with not enough homes for sale in relation to buyer interest,” Yun said. “Home sales could be held back because of supply factors and not by demand – we’re already seeing this in the Western states and in South Florida.”

The median existing home price rose 2.5 percent over the year to $163,800, with distressed homes accounting for one in three sales in March (29 percent), with 18 percent representing foreclosures and 11 percent short sales. NAR points to signs of distressed sales declining in volume, noting that distressed listings accounted for 34 percent in February and 40 percent in March 2011. Foreclosures typically sold for a 19 percent discount below market price in March, and short sales averaged a 16 percent discount.

Recent data from Lender Processing Services paints a different picture, claiming that as of January, the number of short sale transactions outnumber foreclosures. Regardless of NAR or LPS’ reporting, both consistently show that distressed sales of all types continue to have an impact on home values.

All-cash sales volume fell 1.0 percent to 32 percent in March, down 3.0 percent from March 2011. Investors account for one in five homes purchased in March, also sliding slightly. First time buyers rose a single percent to 33 percent of transactions in March, a level which has remained relatively consistent over the last year.

Traffic up, interest rates down

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.95 percent in March, up from a record low 3.89 percent in February; the rate was 4.84 percent in March 2011; recordkeeping began in 1971.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said buyer traffic is up. “Our members are reporting an increase in foot traffic from a year ago, but more importantly, home shoppers this year are much more serious about finding the right home and making an offer,” he said. “Stabilizing home prices and historically favorable affordability conditions are giving buyers more confidence, and Realtors® have become more optimistic since the beginning of the year from the positive shift in buyer patterns.”

Regional sales varied

Existing home sales fell 1.7 percent in the Northeast, yet rose 5.5 percent from March 2011. The median price was $228,300, falling 1.9 percent from March 2011.

In the Midwest, existing home sales were unchanged for the month, but are 15.9 percent above March 2011, with a median price up 5.2 percent over the year to $132,800.

Existing home sales fell 1.1 percent in the South, and are up 3.6 percent over March 2011. The median price was $146,500, a 6.2 percent increase from March 2011.

In the West, completed transactions fell 7.4 percent from February, but are only 0.9 percent below March 2011. The median price rose 1.6 percent from March 2011 to $198,300.

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 discrimination.

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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