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Some Predict Recovery With News of Rising Pending Home Sales



Nine solid months = recovery?

real estate salesFor the ninth month in a row, pending home sales are up, according to the National Association of Realtors.

From the NAR: “The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, increased 3.7 percent to 114.1 from 110.0 in September, and is 31.8 percent above October 2008 when it was 86.6. The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2.”

“This fact is extremely relevant because it’s an indicator of consumer confidence. This time around, we have well qualified buyers, getting homes at good prices with low interest rates and enough equity going in to make sense long term. These are solid purchases and will continue to drive home sales up,” said Keller Williams Realtor Jennifer Klaussen.

NAR Chief Economist said, “still, as inventories continue to decline and balance is gradually restored between buyers and sellers, we should reach self-sustaining housing conditions and firming home prices in most areas around the middle of 2010. That would mean broad wealth stabilization for the vast number of middle-class families.”

This is all good news, but I still have to wonder about predicting recovery conditions when foreclosures, delinquencies as well as bankruptcies are at record highs, and builders are suffering massively, what say you?

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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  1. Eric Hempler

    December 2, 2009 at 12:11 am

    Just like you can’t predict the bottom or the top I don’t think you can predict the recovery. In the Twin Cities I’ve been hearing rumors of another wave of foreclosures coming up. I also know in my market homes under $150K are experiencing a Seller’s Market, homes between $150K – 250K have a balanced market and homes above 250K have a buyer’s market. I don’t see the economy recovering until more jobs are created, which will make more buyers.

  2. bficker

    December 2, 2009 at 1:14 am

    The number of home sales doesn’t mean much when the price in our market is down over 50% and still falling. The stuff selling is under $100k…

  3. Greg Cooper

    December 2, 2009 at 9:19 am

    Our market will be very busy through mid 2010 starting from just after the first of the year. When the homebuyer incentives run out, the seasonality is done (big for us each year after mid July) and the looming interest rate increases become reality sometime later next year, we’re in for a prolonged slow period. Could be a devastating period. For those who believe in the double dip, that’s where it starts. The people who believe we’re in a true recovery are the same ones that don’t get that once the bank stimulus runs out, the stock market is headed south in a big way.

  4. Ken Montville

    December 2, 2009 at 9:56 am

    I’m not as much doom and gloom as Greg but I do believe this housing spike is directly related to the stimulus. Another hopeful spot are the new Treasury guidelines for short sales. If we can shake some of the inventory out of the market we may have a chance at true equilibrium that will not be so stimulus dependent.

  5. Benn Rosales

    December 2, 2009 at 10:00 am

    It’s like sand eroding at the foot of a statue made top heavy by the weight of the burden on its shoulders- the mini bubble.

  6. Joe Loomer

    December 2, 2009 at 5:09 pm

    Not happening here – we’ve had three good months, with November coming in at least 27% better than last year, but it’s all last-minute folks that didn’t know if the tax credit would be extended. Our inventory is literally stationary – and has been since January of last year – no matter how many sales take place each month. That in itself is a little weird, but consider many folks are only now deciding to test the listing waters after such a bleak sales landscape since 2006.

    I think we may be finding out what the new “real” is here – but then again we also never had the Sellers Markets experienced in the hardest hit areas (our record low absorption rate was 4.9 months in 2005).

    Navy Chief, Navy Pride

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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?



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…<<<<<


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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.



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.

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.


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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.



gas tax


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.


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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