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Sales of New Single Family Homes Rises Over Six Percent

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New Construction Stats

real estate sold signOctober’s new home sales stats are in and the 6.2% rise in sales easily beat speculators’ estimates after a rough year in real estate sales. Transaction levels in new home construction vary across the nation, and Realtor Danelle Guilbeau of Boulevard Realty in Houston, Texas said, “we saw a year over year increase in sales of 13.8%, however, I take that with a grain of salt.  October 2008 was when we were struck with Hurricane Ike and we saw major declines in home sales for the next few months.  This is the second month in a row in which we have had a great year over year increase.”

Analysts aren’t getting excited about the uptick either as they point to factors such as the tax credit that caused a run up in sales prior to the extension, getting some builders excited and their hammers swinging yet stagnant traffic so far in November. Unemployment rates have yet to return to a healthy level and Reuters reported that the Midwest saw a 20% dip in sales, indicating that not all segments across America are particularly poised to help this trend moving forward.

“I hope that this is a trend upward, but I will still remain guarded as Houston has always done well because the cost of living is so low, comparatively speaking, to other markets.  I assume some of the national increase is due in part to the push for home sales by using the tax incentive.  Now that it has been extended and we have essentially been “crying wolf” regarding the need to utilize it before it expires may end up having a negative impact over the next couple of months. I’ll be watching and waiting to see,” said Guilbeau.

These are tricky times and while some are cynical, others are optimistic yet guarded, but in rough times like these, most people whose own mortgages rely on the sale of real estate choose to cling to any glimmer of hope for recovery.

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9 Comments

9 Comments

  1. Ken Montville

    November 26, 2009 at 9:26 am

    New Home sales are up and Existing Home sales are up. A good sign? Yep. It’s only temporary, though. The tax credit won’t last forever and unless lending loosens up a bit and mortgage rates stay low, we’ll be seeing another downturn by the end of the 3rd quarter or beginning of the 4th quarter in 2010.

    The other part of New Home sales is the decrease in inventory (as is Existing Home sales). If builders start going nuts, again, and build on any piece of vacant land they can find, they’ll find themselves in the same hot water. Let the inventory shake out. Supply and demand. If we can get the supply down to a level that matches the number of buyers that are both financially qualified and motivated to purchase, we’ll see some light at this end of this long, dark tunnel.

  2. John Badalamenti

    November 26, 2009 at 9:33 am

    Two comments: 1-All real estate is local. 2- Mortage rates are currently at historic lows, however, there’s a good chance that when Uncle Sam stops purchasing mortgage backed-securities at the end of March, interest rates could start rising.

  3. Houstonblogger

    November 26, 2009 at 10:03 am

    Just a heads up, those stats for Houston were all single family home sales. New home sales stats vary greatly by market area in Houston.

  4. Doug Francis

    November 29, 2009 at 9:50 am

    I think it will be interesting to look at the total number of home sales in 2009 against a 20 year chart. And then compare the national total sales volume to a 20 year chart too. I have found that inventory and demand fluctuate wildly from one town or region to another.

    I am glad that you mentioned that the numbers used were compared to a post hurricane scenario, especially since my long-term memory was wiped clean when I switched to Windows 7.

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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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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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Economic News

Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.

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Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.

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Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

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