February 8th, 2010
Posted by Thomas Wolter
STILL NORTH OF 10,000… Last week, stocks took investors on a wild ride, but when all was said and done, the venerable Dow remained defiantly above 10,000. Investor concerns focused mostly on a “sovereign debt crisis” in Europe. Basically, Portugal had trouble selling its treasuries. Then, Spain, whose 19% unemployment is way worse than any European country except Latvia, raised its deficit forecasts. Finally, people questioned if the Greek government has the fiscal discipline necessary to pay back its loans. European markets tanked and Wall Street roller-coastered. For the week, the Dow was off 0.5%, to 10012.23; the S&P 500 slipped 0.7%, to 1066.19; while the Nasdaq was down just 0.3%, to 2141.12.
Investors also aren’t completely sold on our own recovery. The problem of course is jobs, the most lagging of all economic indicators. Weekly initial jobless claims rose by 8,000, a bit worse than expected. Then Friday’s January employment report showed a loss of 20,000 jobs, when a 13,000 gain was expected. But hey, the unemployment rate fell to 9.7%! Average hourly earnings were UP 0.2% for the month and UP 2.0% over last year. Also, total hours are up at a 1.8% annual rate in the last three months. This works out to about 200,000 jobs a month, showing there’s a growing demand for labor, which companies are meeting by increasing hours. Needless to say, they can’t keep that up indefinitely.
Now some really good news…..Personal income was UP 0.4% in December and personal consumption rose 0.2%. Over the past three months, real inflation-adjusted consumer spending is UP at a strong 3.6% annual rate. Not surprising, given that in the last nine months, compensation per worker is UP at a 4.7% annual rate. In line with that, several retailers announced same store sales, with most beating estimates — some by substantial amounts! The ISM Manufacturing index hit 58.4, a five-year high, and ISM Services went to 50.5 in January, signaling expansion in the non-manufacturing sector too.
The Pending Home Sales Index recovered from its November slump, increasing 1.0% in December, putting it 10.9% over its level of a year ago. National Association of Realtors chief economist Lawrence Yun sees “…a broad improvement over year-ago levels. December activity was the fifth-highest monthly tally in two years.” The slump was attributed to the rush before November to grab the tax credit set to expire at the end of that month. We now know the tax credit was extended to buyers who can sign a contract by April 30 and close on the home by June 30. It’s also been expanded, adding a $6500 credit for repeat buyers to the $8,000 credit for first timers. The NAR’s Yun estimates 2.4 million households should take advantage of the credit this year.
The National Association of Realtors also released their adjusted overall outlook for this year and next. They estimate existing home sales will grow from 5.19 million in 2009 to 5.66 million in 2010 and 5.7 million in 2011. They see new home sales growing from 375,000 in 2009 to 446,000 in 2010 and 637,000 in 2011. They believe prices have bottomed, projecting a 3.4% hike in the median price for existing homes to $179,800 this year and then a 4.3% rise to $187,500 in 2011. New homes should go up 3.7% this year to a $221,300 median price and then 4.7% in 2011 to $231,700.
February 1st, 2010
Posted by Thomas Wolter
STILL SLIPPING… There were plenty of good things to consider last week, but investors chose to dwell on the negative tidbits instead. This sent stocks down for the third week in a row, making January the worst month for the markets since February 2009. The week began with Apple reporting its most profitable quarter ever. Microsoft and SanDisk also made the tech sector look good by beating earnings estimates, but Wall Street worried about the companies’ cautious outlooks. Oh well. We even saw Consumer Confidence UP in January for the third month in a row! For the week, the Dow dipped 1.0%, to 10067.33; the S&P 500 slipped 1.6%, to 1073.87; while the Nasdaq was down 2.6%, to 2147.35.
Friday we got the terrific news that the U.S. economy grew in Q4 of last year at a 5.7% pace, the fastest GDP growth rate in six years. Pessimistic observers seem scared to admit the economy is in fact improving, commenting that inventories accounted for a large part of Q4 growth. In fact, final sales, which is GDP excluding inventories, are UP at an accelerating pace for three straight quarters! The Chicago PMI, expected to decline, instead increased, showing growing strength in Midwest manufacturing. And the employment index came in at the highest level since 2005, reporting its first positive number since 2007.
Last week began with December Existing Home Sales dropping 16.7%. Some observers felt this was the result of uncertainty over the homebuyer tax credit, scheduled to expire at the end of November. The tax credit was, as we now know, extended into this year, but it wasn’t announced soon enough to help December sales. Nonetheless, Existing Home Sales are UP 15.0% over a year ago. And the median price of an existing home is now $178,300, UP 1.5% over a year ago and the best year-over-year comp since 2006. Finally, inventories are now down to 3.29 million, their lowest reading since March 2006. Wednesday, New Home Sales were reported at a 342,000 annual rate, down 7.6% for December. But inventories are now at 231,000, 59.6% below their mid-2006 peak and at their lowest level since 1971, when the population was two thirds its size today.
January 25th, 2010
Posted by Thomas Wolter
Here is the Snoqualmie Pass Real Estate, Mortgage, and Economy information for the week of 1/25/10.
Last week featured a combination of unexpected developments — Chinese credit tightening, Presidential sword-rattling over bank regulatory reform and doubts about Fed chairman Ben Bernanke’s Senate confirmation. These surprises shook investors, sending all market indexes down for the week. But China was just raising interest rates to cool down an economy now growing at 10%. And the President’s tough talk to bankers, plus Senators cooling on Bernanke, were seen by many as political efforts to appeal to people who don’t like the Wall Street bailouts. Of course, all this happened after Republican Scott Brown took Ted Kennedy’s Massachusetts Senate seat. Talk about surprises!
The only encouraging words came from corporate pronouncements on Q4 earnings. Results were better than expected, as 47 of the 60 S&P companies reporting delivered upside results. These included biggies like Google, GE, McDonalds’s and IBM. There were also winners in the financial sector, but investor uncertainty pushed stocks down overall. For the week, the Dow fell 4.1%, to 10172.98; the S&P 500 dropped 3.9%, to 1091.76; while the Nasdaq was off 3.6%, to 2205.29.
December housing starts were reported down 4.0% last week. This put them at a 557,000 unit annual rate, a little below expectations. We did have a colder and wetter December than usual, with a good part of the East hit with the biggest snowfall ever recorded for the month. The drop in starts all came from single-family units, but they’re still 27.7% above their January/February 2009 lows. Volatile multi-unit starts were up 12.2% for the month, following their 69.8% November rebound. Building permits, which are less effected by weather, were UP 10.9% in December, to an annual rate of 653,000 units, well above expectations. There was an 8.3% hike in permits for single-family units, which are up 48.5% over their January 2009 low. Over the past two months, the 18.5% gain in building permits is the largest in 20 years. In line with this, the National Association of Home Builders, which held its annual convention last week, reported that builders expect to start construction on 610,000 homes in 2010. That’s UP 38% over last year!
January 11th, 2010
Posted by Thomas Wolter
It was reported last week that Pending Home Sales (contracts on existing homes) fell 16% in November, not at all surprising since buyers expected the $8,000 tax credit to expire at the end of October. This artificially boosted contract signings for August-October and artificially depressed them for November. Still, November pending sales were higher than at any time from mid-2007 to mid-2009.
In the mortgage world, most experts feel the rates on 30-year fixed-rate mortgages will head up during the next two years, so smart homebuyers are focusing on taking advantage of the present very favorable rate situation along with the tax credit still available.
A NICE START… The new year began very nicely on Wall Street with investors optimistically sending all major stock market indexes UP for the week. There were several pieces of economic data to feel good about. The ISM Manufacturing index rose to 55.9 in December, its highest level since April 2006, signaling industrial expansion five months in a row and indicating real economic growth at a 4.6% annual rate. The December ISM Services index hit 50.1, also signaling expansion, with its employment index moving to the highest level since September 2008. For the week, the Dow was UP 1.8%, to 10618.19; the S&P 500 was UP 2.7%, to 1144.98; while the Nasdaq was UP 2.1%, to 2317.17.
Retailers across the board came in with higher than expected results for December. For example, Target’s same store sales were up 1.8% and Sears were up 0.4%, with Q4 earnings beating estimates. Auto companies reported December sales at an 11.2 million annual rate. This was a faster rise than expected, up 16% from June. Cash-for-clunkers got things started, but car and truck sales continue to build.
Thursday, Initial Unemployment Claims came in at 434,000, putting the four-week moving average at its lowest level since September 2008. Continuing Claims shrank to 4.8 million. Challenger, Gray & Christmas, the major Chicago-based job placement firm, reported layoffs down 72.9% from last year. But the big news came Friday with the December Employment Report. Nonfarm jobs declined 85,000, not as good as expected, but revisions to the prior month’s data showed jobs INCREASED 4,000 in November, their first gain in two years! The December unemployment rate held steady at 10.0%
December 14th, 2009
Posted by Thomas Wolter
Here is this weeks report for Snoqualmie Pass Real Estate.
KEEPING ON KEEPING ON… For the fourth week in a row the markets moved sideways, with one index slightly up, one a bit down and the third flat. Recently, there haven’t been any extreme weekly market moves in the indexes, up or down. Investors aren’t quite ready to believe things are as good as some indicators suggest, but they’re also not buying into any of the bleak scenarios some pundits still proffer. Those pundits jumped all over Fed Chairman Ben Bernanke’s reference in a speech to “formidable headwinds” for the economy. He was actually cautioning us to not expect economic expansion to be too dramatic. His also said: “…our economy has made important progress during the past year….the financial system and the economy have moved back from the brink of collapse, economic growth has returned, and the signs of recovery have become more widespread.” Why didn’t those experts focus on this observation of “more widespread recovery”? For the week, the Dow went UP 0.8%, to 10471.50; the S&P 500 was up just 0.43 points, to 1106.41; while the Nasdaq went down 0.2%, to 2190.31.
They were probably too busy ignoring the good news of a decreasing trade deficit, with exports UP six months in a row, at a 26.4% annual rate! We also saw the four-week moving average of unemployment claims fall to 474,000, its lowest level since September 2008. In fact, for the last six months, the decline in initial claims is faster than the declines during the “jobless” recoveries of 1991-92 and 2002, a signal this recovery may not be jobless. The week ended with November Retail Sales UP a way-better-than-expected 1.3%. So it came as no surprise that University of Michigan Consumer Sentiment also blew past consensus expectations! If you have any questions, please contact me.
Last week gave us more proof the country’s housing market is heating up. According to Freddie Mac’s quarterly national Conventional Home Price Index (CMHPI), home prices were UP 0.9% in Q3 for their second quarterly increase in a row! And the Q2 number was revised upward to 2.0%! These rises have taken back about two-fifths of the price declines seen in Q4 of 2008 and Q1 of this year. Freddie Mac’s chief economist said, “the home-price gains of the past two quarters reflect improving existing-home sales…. Sales volume was up 15% between the first and third quarters of this year.” He also added: “The lowest average fixed-rate mortgage rates in a half-century, lower house prices, incentives to encourage first-time buyers, and loan modification efforts to stem foreclosures have worked together to support sales and reduce the inventory of unsold homes.”
December 7th, 2009
Posted by Thomas Wolter
Here is the Snoqualmie Pass Real Estate Report for December 17, 2009.
Last week investors were fretting over Dubai’s inability to pay back its debt. Those fears subsided early last week, then Friday, euphoria broke out among investors over an unexpectedly good jobs report. This included the first drop in the unemployment rate in a long time and job losses at their lowest level in nearly two years. The markets responded with all three indexes registering gains.
Friday’s jobs report showed a dramatic improvement in the employment situation for November. Payrolls declined only 11,000 for the month, but they were in fact UP by 148,000 after revisions to September and October added 159,000 jobs. Most surprising, the Unemployment Rate went DOWN to 10.0%, a turn-around not forecast until Q1 next year. Economists do not expect a decline every month, but many feel the unemployment rate will be significantly lower by late next year. And get this–total hours worked in the private sector was up 0.6%. But if the hours per worker had stayed the same, the increase in labor demand could have boosted payrolls by 650,000! Interesting reading. For the week, the Dow went UP 0.8%, to 10388.90; the S&P 500 was UP 1.3%, to 1105.98; while the Nasdaq shot UP 2.6%, to 2194.35.
Positive economic reports on housing continue, with October Pending Home Sales UP 3.7%. This was the ninth month in a row Pending Home Sales rose and the index is now 31.8% over October last year. Since this tracks the level of contracts on existing homes, Existing Homes Sales should continue their impressive rise for the next couple of months.
The National Association of Realtors also predicted sales of previously owned homes would go UP 4.8% this year, reversing the downward sales trend of the previous two years. For 2010, the NAR projects existing home sales UP 10.8%, with a 3.6% hike in the median price. For new homes, the median price is expected to rise 3.9%. Of course, smart homebuyers will act now to avoid these anticipated price increases AND take advantage of the newly extended and expanded tax credits. High net worth individuals are already showing up–in a recent survey, 35% said they planned to increase their investments in real estate. 45% of them contend there are significant opportunities in residential markets, with many bargains to be had.
For all of your Snoqualmie Pass Real Estate needs, please click the Real Estate link above.
December 1st, 2009
Posted by Thomas Wolter
Here is your Snoqualmie Pass Real Estate, Mortgage, & Economy update for December 1st, 2009:
The economic reports before Thanksgiving were packed with housing market data and, guess what, they were all extremely positive! Monday saw Existing Home Sales UP 10.1% to an annual rate of 6.10 million, the highest since February 2007. Sales are now UP 20% in the past two months and UP 36% from their January lows. Even better, the supply of existing homes was down to just 7 months, with inventories down to 3.57 million, the lowest level in almost three years. This puts existing homes very close to the 6-month supply level of a healthy housing market.
Wednesday, New single-family Home Sales were UP 6.2% in October to an annual rate of 430,000 units. New Home Sales are now UP 30.7% over their January low. The unsold supply of new homes dropped to 6.7 months as of October, with inventories at 239,000, 58.2% down from their mid-2006 peak and at their lowest level since mid-1971. The median price was down only 0.5% from a year ago and average price down just 4.7%.
On Tuesday, for example, Q3 GDP growth was revised down to a still substantial 2.8% annual rate. The key item in the report was the look at Q3 corporate profits, which grew at a very strong 50% annual rate, the third consecutive quarterly increase. Wednesday, initial jobless claims dropped to 466,000, sending the four-week moving average down to 496,500, below the level a year ago. Continuing claims are now down to 5.423 million. The Richmond Fed Manufacturing index showed expansion of activity for the seventh straight month. Consumer Confidence went up to 49.5 for November, beating consensus estimates. This tied in nicely with Wednesday’s reports showing personal incomes are rising, consumer spending is up and the savings rate is 4.4% vs. 1.7% just two years ago. Even non-mortgage consumer debt is down 5% from its mid-2008 peak.
TWO KINDS OF BLACK FRIDAY… Leading up to Thanksgiving, we had lots to be grateful for, with market gains and encouraging economic reports. Retailers’ Black Friday exceeded expectations, but unfortunate financial news from Dubai turned Wall Street’s Friday a depressing black, with the Dow losing 154 points on the day. The Dubai government announced there would be a six-month “standstill” on debt repayments for Dubai World, its holding company. This sent world markets reeling with fears of multi-billion dollar defaults. But Dubai is part of the super-wealthy United Arab Emirates (U.A.E.), which should provide deep support. In addition, Dubai’s debt is mostly held by U.K. and European banks, with little U.S. involvement. The situation bears watching, although our recovery remains clearly on track. The Dubai surprise left the Dow off 0.1% for the week, at 10309.92; the S&P 500 was up just 0.11 points, to 1091.49; while the Nasdaq slipped 0.4%, to 2138.44.
For all your Snoqualmie Pass Real Estate information please see the real estate link at the top of the page.
November 16th, 2009
Posted by Thomas Wolter
Here is the Snoqualmie Pass Real Estate review for last week: Thursday the Wall Street Journal reported Q3 home sales at an annual rate of 5.3 million units. That was an 11.4% gain over Q2’s 4.76 million units. Experts put much of the rising sales to the tax credit of up to $8,000 for first-time homebuyers. A week ago Friday, the President signed a bill extending that tax credit well into next year and expanding it to first-time buyers with higher incomes as well as to existing homeowners, with a $6,500 limit. National Association of Realtors chief economist Lawrence Yun feels “rising sales from the expanded tax credit should stabilize home prices by next spring.” That same tax credit bill also created a new tax break for businesses. The bill lets large firms claim cash refunds on taxes they paid going back five years, to offset current losses. The carry-back period had previously been just two years. Experts estimate this could improve the cash positions of big home builders by hundreds of millions of dollars to further help the recovery. Luxury home builder Toll Brothers is doing just fine already. Tuesday they announced their fiscal Q4 had a 42% jump in contracts over last year. And the value of those contracts was 62% higher than a year ago. The NAR’s report on home prices said most U.S. cities saw gains in the median price of single-family homes for Q3–the second quarter in a row of price gains. Prices were still down from Q3 a year ago, but the pace of the decline has been slowing. Many experts feel the shrinking supply of unsold homes suggests the housing market is edging closer to price stabilization. Even foreclosure fillings fell in October for the third straight month.
HOLDING AT 10,000… We’ve now had two weeks in a row in which investors were confident enough in the recovering economy to keep the Dow Jones Industrial average north of that magic 10,000 number. The S&P 500, a broader indicator of business health, was also up nicely for the week, as well as the tech-heavy Nasdaq, which posted the biggest jump of all. The week got off to a great start on the news that finance ministers and central bankers from 20 major world economies–the “G-20″–will keep their financial support coming until the global recovery is certain. Investors also liked the news that Hewlett-Packard made a deal to buy 3Com to expand its networking business and increase its position in China. Wal-Mart reported a better-than-expected 3.2% boost in Q3 profits and an improved outlook for the year, although it gave a cautious forecast for Q4. The Trade Balance showed exports UP five months in a row since bottoming in April. This is a 24.1% annual growth rate, with imports up at a 32.6% rate. The discrepancy makes for a deficit, but it’s billions smaller than last year. The reality is, the spike in imports and continued export gains signal to many that the economy is getting better. Meanwhile, initial jobless claims fell again last week to 502,000 and the four-week moving average was the lowest in almost a year. For the week, the Dow finished UP 2.5%, to 10270.47; the S&P 500 was also UP 2.3%, to 1093.48; while the Nasdaq went UP 2.6%, to 2167.88.
November 9th, 2009
Posted by Thomas Wolter
Click Photo for Info
Here is the lastest information on Snoqualmie Pass Real Estate, Mortgage and the Economy: Big news for the housing market came Friday when the President signed a bill extending and broadening tax credits for homebuyers. Major points were first reported in an Inside Lending Bulletin last Thursday. The tax credits apply to contracts signed by April 30, 2010, that close by June 30. Income limits for eligibility have been increased to $125,000 per year for individuals and up to $225,000 per year for couples. Credits up to $8,000 continue for first-time buyers but there is now a $6,500 tax credit for buyers who’ve owned their current home at least five of the last eight years. However, homes selling for more than $800,000 are not eligible. The week began with September Pending Home Sales coming in UP for the eighth month in a row. The National Association of Realtors index was UP 6.1% for the month, and UP 21.2% over September a year ago! The index hit 110.1, with 100 equaling the average level of sales contracts in 2001, the first year measured by the index.
Let’s be clear. The job market is lagging behind the turnaround analysts are seeing in the overall economy. 10.2% unemployment is the highest since 1983, though still below that era’s 10.8% rate. And because of the economic growth that began in the summer, some economists now feel unemployment is at its peak or very close. There were encouraging signs in Friday’s numbers. There were fewer jobs lost than first reported for August and September. And the three-month average of job losses has declined in each of the last eight months.
Getting back to more obviously positive economic news, the 9.5% productivity gain was its largest boost since 2003. ISM Manufacturing was much better than expected, now solidly in above-50 expansion territory at 55.7. ISM Services has also begun to expand at 50.6, while Construction Spending bumped up 0.8% and Pending Home Sales saw the great shot up we covered above. The Fed’s policy statement after last week’s meeting recognized for the first time that household spending is “expanding” now, rather than “stabilizing” as they characterized it before.
Hello 10,000 and above. The Dow finished above that magic number when the market closed for the week. The S&P 500, which many consider an even better indicator of investor sentiment, was up every day. The big jump came Thursday with solid earnings from tech giant Cisco and a 9.5% jump in Productivity. Friday saw what some considered a gloomy October Employment Report, but investors wouldn’t let it push the Dow under 10,000. For the week, the Dow finished UP 3.2%, to 10023.42; the S&P 500 was also UP 3.2%, to 1069.30; while the Nasdaq went UP 3.3%, to 2112.44.
November 8th, 2009
Posted by Thomas Wolter
Yesterday afternoon the snow started piling up, and it was time to get packed up and off the mountain before travel started to get challenging….ahum. By 3 pm on Saturday afternoon in Snoqualmie Pass there were four inches of snow on the ground, and the flakes were coming down big time. It seems as though we are in for an early season this year, and Steven’s Pass ski area has already set an opening date of Nov 13, subject to more snow accumulations. For more on the snow covered highways click Snoqualmie Snow.
Also, this weekend commenced the ski swap sales, with Redhook Brewery changing their dates and coming to the calendar first with their always excellent swap meet from Friday thru Sunday. Over the last few years the Redhook swap meet has occured the weekend prior to Thanksgiving, but this year the big event came a little early. Hope you made it, and see you on the slopes.
