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Economic News

New home sales jump 20% for the year, hitting two year high

After news that permits for new home sales were on the rise, the Census Bureau reports sales are also improving – welcome news for this extremely hard hit sector.

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Single family home sales skyrocket

According to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD), sales of single family homes jumped 19.8 percent from May 2011 to May 2012, and prices are on the rise as well, signaling the beginning of a slow recovery for one of the hardest hit sectors in the economy.

Between April and May, new home sales jumped 7.6 percent to a seasonally adjusted 369,000-unit annual rate, hitting a two year high, beating forecasts for the month. The last time sales were this high was when the homebuyer tax credit was fueling sales in spring of 2010.

Some are reserving their enthusiasm for a recovery, however, as sales are barely at 25 percent of their summer 2005 peak, and tight lending combined with extremely competitive pricing of distressed homes continue to hold back the new home sector.

Permits, starts, and builder confidence

According to the U.S. Census Bureau data released last week, home builders applied for permits in May to build new homes at a seasonally adjusted annual rate of 780,000, jumping 7.9 percent above April 2012, and 25 percent above May 2011, hitting their highest rate since September 2008. The increase in permits echoes the increase in builder confidence during the month of May which was at its highest level in five years.

There is a growing disparity, however, between the improving single family sector and the increasingly volatile multifamily sector as actual housing starts for single family rose 3.2 percent for the month while multifamily took a 24.2 percent dive. Overall, housing starts increased 2.85 percent over the year when looking at both sectors together.

Regional performance varied

According to the report, new home sales were boosted primarily by a spike in the Northeast which saw a 36.7 percent increase in sales in May, their highest level in nearly three years, as the South jumped 12.7 percent, reaching a two year high.

Slumping sales of 10.6 percent for the month in the Midwest did not drag down the national numbers, nor did the slight 3.5 percent drop in sales in the West.

The new home sector is expected to continue recovering, but it is certain that after a punishing recession, there is a long way to go in order to reach what used to be “normal.”

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10 Comments

10 Comments

  1. Mike Schmidt

    June 25, 2012 at 7:40 pm

    Uh oh. Somebody’s going to call the manse and tell Mitt that the economy’s not all bad.

  2. AgentGenius

    June 25, 2012 at 11:04 pm

    okay, kitten, it’s still DRASTICALLY below where it was pre-crash, calm down 😉 (ps: this is obviously Lani)

  3. LennarCharNC

    June 26, 2012 at 1:19 pm

    @CENTURY21 @AGBeat Great news about rising new home sales!

  4. MaryPopeHandy

    June 26, 2012 at 1:26 pm

    @CENTURY21 @AGBeat Wow, that is an enormous increase! Thx for sharing!

  5. Agent_Directory

    June 26, 2012 at 3:08 pm

    Good news #realestate! RT @CENTURY21 @AGBeat New home sales jump 20% for the year, hitting two year high, reports: https://t.co/ORFMKtSj

  6. Pakistan Real Estate

    June 29, 2012 at 3:43 am

    After facing downfall, the real estate sales are at upward trend in many regions of the world. In Pakistan, the property prices are at an increasing trend. But, the prices are lower then, the past, which means this is the right time to invest, if someone wants to earn huge profits in near future because soon the property prices will be on top.

  7. premlets

    June 29, 2012 at 9:37 am

    This is a very interesting read! I myself am from the UK and we are seeing quite a big drop in house prices rather than a rise! Now I am not clued up on current affairs but the way that our economy is going I cant say I am surprised we are seeing a drop.
     
    As jobs are scarce and money is very tight people are selling up and wanting quick sells rather than waiting around and getting the right price, can’t say I blame them really! Sorry I am rambling………………Being a letting agent myself it is very interesting to read about the worlds current affairs.
     
    Not sure if you guys were affected as much as we were with the recession but it hit us very hard – what are peoples opinions on this? anyone from different coutries finding that their government is reacting in different ways or their economy reacting in different ways?
     
    Thanks for reading this guys
     
    Liam
    Personal Advisor
    https://www.prem-lets.co.uk/

  8. Neilpbohbm2cxq

    July 6, 2012 at 2:16 pm

    @homesandlandman https://t.co/cqNgLJxa

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Economic News

How small businesses can keep up with the changing workforce

(ECONOMIC) Trade schools are booming as career outlook grows. College enrollment is down. The workforce is changing. How can small business keep up?

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Trade employees in the workforce

College enrollment has dropped off by three million in the last decade, with a drop-off of one million due in the last several years as a direct side effect of the Covid-19 pandemic. This phenomenon clearly does not bode well for the future of the United States’ economy and workforce, with students who attend low-income schools and come from low-income families being the most affected. These changes are disproportionately affecting students from low-income schools and families, the very people who need higher education the most, and are erasing much of the work done in the last decade to help close the income and race gap between students, colleges, and socioeconomic backgrounds.

Enrollment in trade schools is skyrocketing.

Recently, trade schools have seen a 40% bump in enrollment across the board. Many students are enticed by the fact that trade schools are affordable and offer a quick turnaround, with students paying $16,000 or less for their program, and their training taking a year or less to complete. Beyond that, those who complete trade school is all but guaranteed a job on graduation day. Their earning potential is often two or even three times higher than the initial cost of attending the program. As many have found, the same cannot always be said about those who pursue a college education.

While the average cost of college at an in-state and public institution hovers at around $28,775 per year (according to Forbes) and takes an average of four years to complete means that trade students have a cheaper educational cost, (between $16,000 to $33,000 for the entire program, or about equal to just one year of a public college tuition) can get work in their field more quickly, and can usually make more than their educational costs in their first year on the job. Tradespeople make an average of $54,000 fresh out of trade school, which rivals the role average college student’s first salary of $55,000. It’s no wonder so many people are choosing to forgo a formal education for trade school!

The almost insurmountable cost of college combined with ever-growing inflation and a lengthy list of requirements just to get a post-college job, all for a low salary and with students having hefty loans to pay back, also play a key role in the downturn in the popularity of college.

The implication of fewer college-educated people, however, means that over time, the United States as a whole could face an economic downturn, as it gives rise to many more blue-collar workers. This can irrevocably alter the makeup of the workforce. Despite current unemployment rates being among the lowest they’ve ever been, the American people are already starting to see a shift in the labor market.

Already, we see a strain in the labor market when 25% of skilled workers in the U.S. exited the workforce following the Covid-19 pandemic. The economy has become so highly specialized that if the U.S. were to keep up the trend of losing college-educated workers, there could irreversible damage to the United States’ economy, deepening the ever-growing divide between the middle class and the working class, further reducing the ability to affect the global economy, knocking the United States out of the classification of a “global superpower.” To make matters worse, much of the United States labor pool is outsourced, and we are seeing the rise of artificial intelligence and robotics taking over many jobs, especially minimum wage jobs. While none of these factors alone vastly affect the U.S. labor market, this is only the tip of the iceberg.

So what can employers do when the makeup of the workforce starts to shift?

Employers could shift the focus on the years of experience rather than the type of education the potential employees have, as well as offering more extensive on-the-job training, which is already commonplace in some industries. Even for those with a college education, the requirements for entry-level jobs seldom match the salary, with many employers requiring a four-year degree, two or more years of experience, and fluency in different programs which vary from company to company. Employers, if possible, need to offer higher salaries with fewer requirements, as many young people are finding the pursuit of college, plus the various other requirements just to be considered for a barely above minimum wage job, while they’re drowning in student debt fruitless, so they forgo college altogether.

A post-pandemic society looks vastly different, and employers must adapt to keep up.

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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 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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