Monday, February 9, 2009
Treasury Delays Bank Bailout
In the article “Treasury delays bank bailout announcement” http://www.reuters.com/article/newsOne/idUSTRE5160AM20090209, it is stated that the reason the Treasury has to delay the President’s bank bailout plan is because of the debate in the Senate about the “Stimulus Plan.” Both sides say they believe they have the best path to go down. In the past years, tax cuts have been implemented to stimulate the economy, and the economy continued to tumble. Those who support this are the ones who lost in the last election, and who, in my opinion, are resentful of losing. They are the ones who said the economy was strong, as tens of thousands of Americans lost their jobs and their homes. History has shown that tax cuts do not stimulate the economy. The banks need to lend money on “good” loans. There are those who think the banks should take the hit for what has happened. The problem is that if they take too big a hit, everyone suffers. It is true the new tools that the current administration is proposing have not been tried before, but we need something new to get us out of our current situation. Every day delayed is a day that we go further into the recession.
Monday, February 2, 2009
Input from the U.S. Senate Stimulus
In the article “Stimulus: Senate’s housing hopes”, http://money.cnn.com/2009/02/01/news/economy/Senate_stimulus_housing/index.htm?postversion=2009020117, the author talks about some of the ideas the Senate and the President have presented to turn the economy around. They believe as most people do that the Real Estate Market in the USA has to recover for the overall economy to recover. One thing that links all of the plans mentioned in this article is for Troubled Asset Relief Program, (TARP), monies to be given to mainstream America and not the banks or Wall Street.
Recent history has shown that when the troubled banks have been given money to get themselves out of their current situation, instead of investing in mainstream America, they purchase other companies to expand their current businesses. Instead of having a stabilizing effect things got worse and they asked for more government money to get them out of their new situation.
We are in an economical crisis that is unique in history. Until these programs like the ones that are mentioned in this article are implemented it will not be known if they will work. We have attempted to help the financial institutions that had historical profits over the past years, profits that in the end were illusions and that the world is paying for now. We need to attack this issue from a different direction, one that will help the people who are paying for the profits that never were.
Recent history has shown that when the troubled banks have been given money to get themselves out of their current situation, instead of investing in mainstream America, they purchase other companies to expand their current businesses. Instead of having a stabilizing effect things got worse and they asked for more government money to get them out of their new situation.
We are in an economical crisis that is unique in history. Until these programs like the ones that are mentioned in this article are implemented it will not be known if they will work. We have attempted to help the financial institutions that had historical profits over the past years, profits that in the end were illusions and that the world is paying for now. We need to attack this issue from a different direction, one that will help the people who are paying for the profits that never were.
Monday, January 26, 2009
Restrictions on Bank "Rescue Package"
In the article “Obama Signals Tough Restrictions on Banks in Rescue Package” on Bloomberg.com, (http://www.bloomberg.com/apps/news?pid=20601087&sid=aFK5mdeTGKTU&refer=home), the author says that President Obama is asking for restrictions on the money the federal government will be giving banks to “bail” them out. If there were tougher restrictions and more accountability the first time around the economy, especially the Real Estate market, in this country would be doing better. Even banks that were not in crisis last October and that may have avoided their current situations, in their greed have more taken on more liabilities and are at risk. Evidence of this is in the article “First Centennial Bank of California Seized by State Regulator”, (http://www.bloomberg.com/apps/news?pid=20601087&sid=aIFeOX9TTZbE&refer=home), which states the third bank this year has been seized by the government because the bank failed
After all of the money that has been given to banks and other businesses, the government should start working to protect the people. It is essential at this time that financial institutions begin lending money for home mortgages. These regulations will help make that happen.
After all of the money that has been given to banks and other businesses, the government should start working to protect the people. It is essential at this time that financial institutions begin lending money for home mortgages. These regulations will help make that happen.
Saturday, June 28, 2008
Local media continues with incorrect Real Estate market coverage
This article “Market won’t bottom out till next year, experts say”, http://www.thenewstribune.com/business/realestate/story/397011.html , found in The News Tribune, a local Tacoma, WA paper, begins by saying that housing prices nationally are falling at the sharpest rate ever. As I have stated before, Real Estate is NOT a national market. Even within a given market (whether that market is doing well or not) there are pockets that are contrary to what the market is doing.
The author compares this year’s Real Estate market with last year’s. We all know there has been an adjustment in the overall Real Estate market in the U.S. including the Puget Sound/Pierce County Area over the last couple of years. From information gotten from the NWMLS web site, it can be seen that the average home in Pierce County has gone up in price 3.47% from January to May of this year. During this time, the “Pending” home ratio, (the percentage of the active homes on the market in relationship to the number of homes that have contracts on them - homes that people want to purchase), in Pierce County has risen from 8% to 10%. This shows that although this is not the inflated 2005 market (which was not a healthy housing market environment), the local market here continues to correct. If the house is priced accurately, it will sell in our market.
The author compares this year’s Real Estate market with last year’s. We all know there has been an adjustment in the overall Real Estate market in the U.S. including the Puget Sound/Pierce County Area over the last couple of years. From information gotten from the NWMLS web site, it can be seen that the average home in Pierce County has gone up in price 3.47% from January to May of this year. During this time, the “Pending” home ratio, (the percentage of the active homes on the market in relationship to the number of homes that have contracts on them - homes that people want to purchase), in Pierce County has risen from 8% to 10%. This shows that although this is not the inflated 2005 market (which was not a healthy housing market environment), the local market here continues to correct. If the house is priced accurately, it will sell in our market.
Friday, June 6, 2008
For Sale signs vs sales
The author of this article, http://www.breitbart.com/article.php?id=2008-05-26_D90TA3D80&show_article=1&cat=breaking, is reckless in his quoting of statistics and obviously just wants to put a negative spin on what has happened and what is happening in the real estate market across the country. He states that the country is in a housing “bust” that is the worst since World War II. If the author did his home work, he would see that the housing market overall has increased steadily over the last 40 years. It is one industry that continues to improve on a long term basis.
He is correct in that the home market has a tremendous impact on our economy. Ten percent of the jobs in this country are associated with the Real Estate industry. Whenever 10 percent of a country’s work force is affected, it affects the economy of that country.
He says that the National Association of Realtors said that 46 “saw declines” in the first three months this year compared to last year. What declines is he talking about? If 46 states did see price declines, that would mean that 4 states didn’t. What of the sales in January of this year compared to the sales in April? Did they increase or does the reporter just want to paint a negative picture to get people to read his article?
I do not claim to know what is happening in the “National Market”, because there is no national market. The houses market varies per state, per region, per city and even per areas in any given city. The degree to which the housing adjustment has affected any given area varies.
Unlike areas of the country where jobs are being lost, the Seattle/Tacoma/Puget Sound area has a strong economy. The job market has gotten increasingly stronger over the past 5 years and is diverse with 4 major job hubs and 2 minor job hubs. We have been affected by the credit industries woes but not the affect of other areas of the country. Since January 2008, sales in King, Pierce, Snohomish, Kitsap and Thurston Counties in Washington Sate have increased 64%, 59%, 67%, 74% and 66% respectively. This does not mean things will go back to the way they were in 2005. It means things are improving in this area.
Yes, because of the greed of a few and the American dream of home ownership by many, there are people who over stretched their means and purchase homes when it did not make financial sense to do so. The financing wave crashed in September of 2007 and the affects are still being felt and will be felt for a while, but the recovery is underway. Different areas had different degrees of difficulty. So it follows that different areas will have different recovery rates.
He is correct in that the home market has a tremendous impact on our economy. Ten percent of the jobs in this country are associated with the Real Estate industry. Whenever 10 percent of a country’s work force is affected, it affects the economy of that country.
He says that the National Association of Realtors said that 46 “saw declines” in the first three months this year compared to last year. What declines is he talking about? If 46 states did see price declines, that would mean that 4 states didn’t. What of the sales in January of this year compared to the sales in April? Did they increase or does the reporter just want to paint a negative picture to get people to read his article?
I do not claim to know what is happening in the “National Market”, because there is no national market. The houses market varies per state, per region, per city and even per areas in any given city. The degree to which the housing adjustment has affected any given area varies.
Unlike areas of the country where jobs are being lost, the Seattle/Tacoma/Puget Sound area has a strong economy. The job market has gotten increasingly stronger over the past 5 years and is diverse with 4 major job hubs and 2 minor job hubs. We have been affected by the credit industries woes but not the affect of other areas of the country. Since January 2008, sales in King, Pierce, Snohomish, Kitsap and Thurston Counties in Washington Sate have increased 64%, 59%, 67%, 74% and 66% respectively. This does not mean things will go back to the way they were in 2005. It means things are improving in this area.
Yes, because of the greed of a few and the American dream of home ownership by many, there are people who over stretched their means and purchase homes when it did not make financial sense to do so. The financing wave crashed in September of 2007 and the affects are still being felt and will be felt for a while, but the recovery is underway. Different areas had different degrees of difficulty. So it follows that different areas will have different recovery rates.
Sunday, April 20, 2008
Mortgage Delinquency Rates
On April 10, 2008 the Wall Street Journal reported http://online.wsj.com/article/SB120776827998402453.html that Equifax, the credit bureau, published a report stating that mortgage delinquencies had risen. The article states that part of what is driving the increase are falling house prices and rising unemployment.
The National Delinquency rate: First Mortgages 4.46%; Home Equity Line of Credit 2.37%; Second Mortgage 5.36%, Overall Delinquency 4.35%.
The States with the highest delinquency rate are Puerto Rico (8.03%), Florida (7.03%) and Nevada (6.59%). Washington State has the fifth lowest rate of delinquency, behind Alaska, Wyoming, North Dakota and South Dakota.
The average home price in many areas of the South Puget Sound and in Pierce County has risen since the beginning of this year. Employment is strong in the Puget Sound Area; the work force has increased, employment has increased and unemployment has decreased.
People who wait until they can see the “bottom” miss it, because seeing it means it has already passed them. Those who capitalize on shifting markets do so because they act close to, but not at, the top and bottom of any market.
If you are thinking of buying a house or moving up to a bigger house, now is the time to act! Delinquency rates will increase over the next 18 months. However, I believe that due to the strength of the Puget Sound economy combined with the number of people who will be moving here from other parts of the country, house prices will also increase.
Marc
The National Delinquency rate: First Mortgages 4.46%; Home Equity Line of Credit 2.37%; Second Mortgage 5.36%, Overall Delinquency 4.35%.
The States with the highest delinquency rate are Puerto Rico (8.03%), Florida (7.03%) and Nevada (6.59%). Washington State has the fifth lowest rate of delinquency, behind Alaska, Wyoming, North Dakota and South Dakota.
The average home price in many areas of the South Puget Sound and in Pierce County has risen since the beginning of this year. Employment is strong in the Puget Sound Area; the work force has increased, employment has increased and unemployment has decreased.
People who wait until they can see the “bottom” miss it, because seeing it means it has already passed them. Those who capitalize on shifting markets do so because they act close to, but not at, the top and bottom of any market.
If you are thinking of buying a house or moving up to a bigger house, now is the time to act! Delinquency rates will increase over the next 18 months. However, I believe that due to the strength of the Puget Sound economy combined with the number of people who will be moving here from other parts of the country, house prices will also increase.
Marc
Friday, April 11, 2008
The media reports that the Real Estate market is floundering and close to death. Is that true for the South Puget Sound?
As a Realtor®, I am able to access tools that the general public doesn’t have. With these tools I created the following tables:
Prices of homes that have sold March, 2008 compared to one year ago:
City/County _____March 2007 ____March 2008 _____%Difference
Pierce County _____318,000 ______305,000 __________-4.0
Bonney Lake ______316,000 ______308,000 __________-2.5
DuPont __________333,000 ______387,000 _________+16.2
Fife ____________310,000 ______271,000 __________-12.5
Firecrest _________369,000 ______310,000 __________-15.9
Gig Harbor ________444,000 ______469,000 __________+5.6
Lakewood _________254,000 ______263,000 __________+3.5
Puyallup __________302,000 ______290,000 __________-3.9
Spanaway _________260,000 ______253,000 __________-2.7
Sumner ___________394,000 ______304,000 _________-22.8
Tacoma ___________272,000 ______273,000 __________-0.4
University Place _____478,000 ______375,000 _________-21.5
Thurston County _____280,000 ______294,000 _________+5.0
Lacey _____________267,000 ______295,000 _________-10.4
Olympia ___________308,000 ______331,000 __________-7.4
Yelm ______________243,000 ______220,000 __________+9.4
Prices of homes that have sold January, 2008 compared to March, 2008:
City/County _____January, 2008 ____March, 2008 ______% Difference
Pierce County ________288,000 ______305,000 __________+5.9
Bonney Lake _________350,000 ______308,000 _________-12.0
DuPont _____________357,000 ______387,000 __________+8.4
Fife ________________293,000 ______271,000 __________-7.5
Firecrest ____________284,000 ______310,000 __________+9.2
Gig Harbor __________426,000 _______469,000 _________+10.0
Lakewood ___________262,000 _______263,000 __________+0.4
Puyallup ____________277,000 _______290,000 __________+5.0
Spanaway ___________264,000 _______253,000 __________-4.2
Sumner _____________250,000 _______304,000 _________+21.6
Tacoma _____________247,000 _______273,000 _________+10.5
University Place _______316,000 _______375,000 _________+18.7
Thurston County _______297,000 _______294,000 _________-1.0
Lacey _______________279,000 _______295,000 _________+5.7
Olympia _____________342,000 _______331,000 __________-3.2
Yelm _______________229,000 _______220,000 __________-3.9
*This representation is based in whole or in part on data supplied by the NWMLS. Neither the Board or its MLS guarantees or is in any way responsible for its accuracy. Data maintained by the Board or its MLS may not reflect all real estate activity in the market. Report reflects activity by all brokers participated in the MLS.
These statistics originate from data from the Northwest Multiple Listing Service, www.nwmls.com. The prices of homes have dropped from a year ago last March. That was a correction that needed to happen. Home prices were going up so fast and so high that new home buyers were being priced out of the market. Without new home buyers to purchase their homes, current home owners cannot move up to a larger home. Without people who can purchase higher priced homes, the Real Estate market will stall. However, if you look at the prices of houses in the Sound Puget Sound area for the first three months of this year, you will see that in most areas prices have started to rise again. This is not true for all areas; however in a normal market areas differ in their pricing and the pace at which they sell. In Pierce County in general, the price of a home has risen in the first quarter of 2008. There is great concern over the future of our national economy. This concern has driven the mortgage interest rates down. There are many parts of the country where the Real Estate market is having great difficulty recovering from the sub-prime mortgage hit. While we are not isolated from the national economy, this area has one of the strongest economies in the country. It is a good time to take advantage of the low interest rates and the high inventory of houses. As soon as the Federal Reserve Bank sees a slight turn around in the economy, they will be wary of inflation and the interest rates will rise.
In my next blog, I will talk about foreclosures and where we stand in relation to the rest of the country in this area.
Marc
Prices of homes that have sold March, 2008 compared to one year ago:
City/County _____March 2007 ____March 2008 _____%Difference
Pierce County _____318,000 ______305,000 __________-4.0
Bonney Lake ______316,000 ______308,000 __________-2.5
DuPont __________333,000 ______387,000 _________+16.2
Fife ____________310,000 ______271,000 __________-12.5
Firecrest _________369,000 ______310,000 __________-15.9
Gig Harbor ________444,000 ______469,000 __________+5.6
Lakewood _________254,000 ______263,000 __________+3.5
Puyallup __________302,000 ______290,000 __________-3.9
Spanaway _________260,000 ______253,000 __________-2.7
Sumner ___________394,000 ______304,000 _________-22.8
Tacoma ___________272,000 ______273,000 __________-0.4
University Place _____478,000 ______375,000 _________-21.5
Thurston County _____280,000 ______294,000 _________+5.0
Lacey _____________267,000 ______295,000 _________-10.4
Olympia ___________308,000 ______331,000 __________-7.4
Yelm ______________243,000 ______220,000 __________+9.4
Prices of homes that have sold January, 2008 compared to March, 2008:
City/County _____January, 2008 ____March, 2008 ______% Difference
Pierce County ________288,000 ______305,000 __________+5.9
Bonney Lake _________350,000 ______308,000 _________-12.0
DuPont _____________357,000 ______387,000 __________+8.4
Fife ________________293,000 ______271,000 __________-7.5
Firecrest ____________284,000 ______310,000 __________+9.2
Gig Harbor __________426,000 _______469,000 _________+10.0
Lakewood ___________262,000 _______263,000 __________+0.4
Puyallup ____________277,000 _______290,000 __________+5.0
Spanaway ___________264,000 _______253,000 __________-4.2
Sumner _____________250,000 _______304,000 _________+21.6
Tacoma _____________247,000 _______273,000 _________+10.5
University Place _______316,000 _______375,000 _________+18.7
Thurston County _______297,000 _______294,000 _________-1.0
Lacey _______________279,000 _______295,000 _________+5.7
Olympia _____________342,000 _______331,000 __________-3.2
Yelm _______________229,000 _______220,000 __________-3.9
*This representation is based in whole or in part on data supplied by the NWMLS. Neither the Board or its MLS guarantees or is in any way responsible for its accuracy. Data maintained by the Board or its MLS may not reflect all real estate activity in the market. Report reflects activity by all brokers participated in the MLS.
These statistics originate from data from the Northwest Multiple Listing Service, www.nwmls.com. The prices of homes have dropped from a year ago last March. That was a correction that needed to happen. Home prices were going up so fast and so high that new home buyers were being priced out of the market. Without new home buyers to purchase their homes, current home owners cannot move up to a larger home. Without people who can purchase higher priced homes, the Real Estate market will stall. However, if you look at the prices of houses in the Sound Puget Sound area for the first three months of this year, you will see that in most areas prices have started to rise again. This is not true for all areas; however in a normal market areas differ in their pricing and the pace at which they sell. In Pierce County in general, the price of a home has risen in the first quarter of 2008. There is great concern over the future of our national economy. This concern has driven the mortgage interest rates down. There are many parts of the country where the Real Estate market is having great difficulty recovering from the sub-prime mortgage hit. While we are not isolated from the national economy, this area has one of the strongest economies in the country. It is a good time to take advantage of the low interest rates and the high inventory of houses. As soon as the Federal Reserve Bank sees a slight turn around in the economy, they will be wary of inflation and the interest rates will rise.
In my next blog, I will talk about foreclosures and where we stand in relation to the rest of the country in this area.
Marc
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