Mixed bag reflected in economic indicators

U.S. home prices rose more slowly in September than in August suggesting weaker sales are taking pressure off lower inventories. In Tampa, home prices rose in September by +.02% from August but this was still +14.5% over the year. Consumer confidence fell in November to the lowest level in 7 months. Consumer confidence dropped to 70.4 in November, down from 72.4 in October. There was a positive signal for the economy as Florida unemployment few to 6.7% ( below the national average of 7.3% ) and apartment building permits achieved their fastest pace in 5 years. This suggests that housing will make a stronger contribution to economic growth in the 4th quarter than was originally anticipated. Plans for construction in the South drove these figures.

New home sales slide for 5th straight month

For the fifth month in a row, fewer Americans signed contracts for new homes. The seasonally adjusted new home sales index dropped to  -0.6 to 102.1, the lowest level since December. A contributing factor was the 16 day federal shutdown when the IRS was not able to verify incomes. Rising interest rates, the increasing cost and uncertainty about health care, and the and rising home prices may also have been factors. There is evidence to suggest the housing recovery is stalling at this time.

Florida leads nation in job creation

Florida added +44,600 jobs in the September thru October period. Tampa added +7100 jobs and has added +39,900 this year. The formerly stagnant construction industry lead the growth. Florida's unemployment rate is now down to 6.7% 

16,000 DOW, lower mortgage interest, fewer unemployed offer hope

On Thursday, the DOW closed over 16,000 for the first time in history. Since the start of the year, the DOW has increased +22%, and has topped three 1,000 point milestones on the way. The DOW has more than tripled since its low point in 2009. It was also reported the number of people seeking unemployment benefits fell by 21,000 last week to a seasonally adjusted 323,000. US wholesale prices dropped for the second month in a row. Thirty year fixed rate interest rates retreated to 4.22% down from 4.35% the week before. These are signs the recovery is continuing.

Tampa area home sales soften

Momentum was reversed in October as home sales went flat falling 2% behind last year. This comes on the heels of a year long trend of increasing sales. For instance, in September, sales were up +18% over 2012. The controversy over flood insurance and the 16 day federal shutdown may have contributed to this slow down. It was also apparent the large investors who were acquiring properties in large numbers have left the market.

Retail sales encouraging

October retail sales grew +.4%  after being flat in September. Analysts looked for sales to be flat due to the 16 day federal shut down. Falling gasoline prices were offset by stronger performances in furniture, electronics, appliance, and clothing sales. This news was encouraging, suggesting that upcoming  holiday sales may be stronger than first predicted.

No plump in the Butterball turkeys

Butterball announced that it will have a limited supply of heavy turkeys ( over 16# ) this holiday season.  Butterball CEO Rod Brenneman told the Associated Press that there is a mystery why some of its turkeys will not plump up in time for Thanksgiving. Apparently, they haven't ingested grain as well this year as in previous years. Larger turkeys are preferred for carving as they have a better meat to bone ratio which increases yield. 

Billions pledged to upgrade Tampa International Airport

A business plan presented to the public on Monday shows $4.2 billion of improvements for TIA through 2033. The business plan includes $2.5 billion in improvements, and $1.6 billion for maintenance items. This plan anticipates traffic increasing from the current level of 17 million to 34 million by 2041. Under this plan, the main terminal will now be able to handle this traffic negating the need to build a new $1 billion North Terminal to handle this volume.

Studio apartments triple in Tampa

Since 2007, the number of studio apartments ( no bedroom ) has tripled to 13,000 in Hillsborough County. Tampa now has 6000 studios averaging 550-600 square feet with rents in the $1200 range.
People are selecting location, as opposed to size, in  a lifestyle decision to rent a studio. They want to be closer to downtown activities.

Student loans now $1.027 trillion and growing

Since 2004, student loans have tripled to the current balance of $1.027 trillion. In the last quarter, the debt rose by $33 billion. Loans over 90 days past due rose to 11.8% in the third quarter, up from 10.9% in the second quarter. Student loans are now 9% of all consumer debt, up from 3% a decade ago.

Wholesale orders increase again

For the third straight month, wholesalers have increased inventories in anticipation of increased business. Seasonally adjusted, stockpiles rose +.4% in September. In August the increase was +.8%.
Wholesale sales increased +.6% in September, up from +.4% in August.

Florida #1 in foreclosures

RealtyTrac reports that Florida pulled ahead of Nevada in October as the leader in foreclosures. In Florida, 1 in every 332 homes received some kind of foreclosure filing.  In Nevada, it was 1 in every 407 homes.  Florida lenders filed 11,606 notices of a foreclosure sale in October. Lenders are beginning to work out the back log of foreclosed homes using more auction sales.

Medicaid showing strength as alternative

Medicaid has signed up 444,000 people in 20 states over the past 6 weeks. This appears to dwarf the sign ups for the nation ACA sign ups plagued by poor management. Starting January 1, 2014, Medicaid is expanded to those with incomes up to 138% of the federal poverty level...$15,856 for an individual, $32,499 for a family of four. The biggest reason for this increase is attributed to the 36 states offering the ACA through the federal website which is not working. People want some type of insurance in place on January 1st.

Florida promotes driverless AV vehicles

Florida is one of 3 states that allow new technology on highways.  Autonomous Vehicles ( driverless ) are coming to the roads. Enter the address you are headed to, computers and software map out the route and take over the drive to the destination. Florida is trying to stay ahead of the planned introduction of these vehicles expected to be introduced around 2020. Florida is trying to create the infrastructure ahead of the introduction and thereby be a leader in this new form of transportation. California and Nevada are the other 2 states permitting AV's to be tested on their roads.

Apartments spur development in Pinellas

The strong rental market is fueling apartment developments in Pinellas County. Largo reports 1200 apartment units are planned or being built. Dunedin, Clearwater, and St. Petersburg are seeing more apartment developments. Communities have been working with developers on development fees to make projects more affordable. There has been little rental development in the past 5 years, and current developments will help ease the current shortage, but may not provide enough affordably priced units. Many of the units under development will rent in the $700-$1400 monthly range.

"Liar" home loans will be hard to get in 2014

In January, new lending rules go into effect which are expected to curtail many of the bad lending practices which contributed to the sub-prime housing crash. The major new requirement is the Ability-to-Repay  condition that makes lenders confirm that someone on the loan has the ability to repay it. The second major change will see the Consumer Financial Protection Agency label certain loans as "qualified mortgages" (QM's). These loans can't be interest only, balloon mortgages, or contain negative amortization provisions, or be longer than 30 years. More than 95% of all existing mortgages already meet the new standards coming  January 10, 2014. Borrowers will be required to prove income with documentation, be within the 43% debt to income ratio, and meet other more conservative conditions of the new law.

Credit card borrowing down for 4th straight month

Consumers continued to tighten their use of credit card debt for the 4th straight month. Consumers increased their borrowing by +13.7 billion in September reaching a seasonally adjusted rate of $3.05 trillion. This was still a  record amount of debt on credit cards. The increase was driven entirely by auto and student loan debt.

Economy grew faster than expected

From July-September, the economy grew  at a +2.8% annual rate, faster than the expected. The growth in the April-June quarter was +2.5%. This growth is about +1% higher than predicted.
Americans purchased more autos and long-lasting good to fuel this growth.

Dow sets new record on 11/6

The Dow closed up + 129 points on Wednesday reaching a new high of 15,747. Standard and Poor's index came within 1 point of their old record. The Nasdaq dropped 8 points to close at 3932. 

Tampa International Airport served 16.9 million passengers last year

In fiscal 2013, Tampa International Airport served 16.9 million passengers. Domestic passengers represented 16.4 million (+.7% growth ) and international passengers 525,060 ( + 6.9% growth).
In the past 2 years, charter flights to Cuba, and new nonstop flights to Switzerland, have fueled growth in the number of international up +28%. The airport reported revenues of $184.3 million,
an increase of +3.8% over 2012.

University of Tampa continues growth trends

This fall, 7343 students are attending the University of Tampa, an increase of +5.5% from 2012. This is  triple the enrollment from two decades ago. There was a  dedication of two facilities held earlier this year for the Peter J.Schoomaker ROTC  and Athletics building, and a new lacrosse stadium.
Recently, UT  finished  the 11 story West Kennedy residence hall, which is the seventh new building in the past 15 years. It has just been announced UT will build a seven story multipurpose structure which will include four stories of parking, classrooms, faculty offices, student meeting and study areas, along with a Campus Safety Center, and an entrepreneurship center designed to launch new concepts and ventures.

63 gigabytees...13.6 hrs daily...for Americans

The University of Southern California released a report this week showing Americans tuned into the radio, television, phones, and computers an average of 13.6 hours a day during 2012. In total,  U. S. media consumption reached 1.46 trillion hours. In 2008, averaged 33 gigabytes a day. In 2015, it is expected this consumption will increase to 15.5 hours reaching 1.7 trillion hours for the year. Texting and video watching on the internet are growing rapidly. For example, video watching was 3 hours a month in 2008, grew to 6 hours in 2012, and is projected to reach 11 hours by 2015. Mobil messaging is having the same kind of growth.

Stock markets setting new records

Last Tuesday, the Dow Jones Industrial average reached a new high. This year, the DOW is up +19%,  the S&P 500 up +24%, and the Nasdaq up + 30%.  Technology shares are leading the way. Many believe the stock market is reasonably priced. It was also noted that 100 stocks of the S&P 500 are making new highs along with the technology stocks. This is considered a healthy sign overall.

The sale of small businesses increasing rapidly

The web site BizBuySell.com, which monitors the sale activity of small business, reports sales of small businesses rose 40% in the third quarter. At the low point in 2009, 1040 small businesses were sold. This year, there were 1685 closings, Retail businesses and restaurants are leading the sales increase. Lenders have become more willing to lend for these small business acquisitions, and owner financing plays a role as well. Some are predicting even faster growth next year in small business sales.

Tampa area encouraging development

The Florida Fairgrounds, at the intersection of I 75 and Interstate 4, is a rare piece of real estate with development potential. The Fair Board has invited developers to propose projects for this valuable piece of real estate. The fair authority's plans lean towards developing the entire 330 acres with shops, hotels, and entertainment businesses. The Hard Rock Café & Casino is right across from the Fair grounds and built on 35 acres. In another area of Tampa, a 380 unit hotel project was being proposed on the Encore site just north of downtown. The developer, Pinnacle Group has offered the Tampa Housing Authority $7.8 million for the site, and would begin development this coming summer. These events, coupled with all the interest in re-developing  Channelside , speak well for Mayor Buckhorn's efforts to bring quality development to Tampa.

Stock market skips October jinx

October has seen the stock market have a number of crashes in previous October's. This year it avoided a crash, did not scare off investors, and set record highs. All this happened in the face of the 16 day shutdown of the government. The S&P 500 is up +23.2% this year and is tracking towards the best year since 2009. Helping support this performance was the announcement by the Feds they will continue buying $85 billion in bonds each month as a means to keeping short term interest rates low so as to promote economic growth.

Going deeper into the posts

If you enjoy the posts on this page, you might enjoy reading my current newsletter which has many interesting articles used to develop these posts. You can also learn about the Freedom Boat Club, vacation rentals, Steven Spielberg's pad that is for sale, tips on buying a home, and workplace tips. Here's the link:
http://amerivest.rezora.com/public/1942426

Consumer confidence takes a dip

The University of Florida's Bureau of Economic and Business Research reports that consumer confidence dropped -7 points to 71 over concerns with the American economy. The prospect of a government shutdown, credit default, and uneasiness with the floundering economy contributed to the drop in consumer confidence. Nationally, the drop was -9 points going from 80.2 down to 71.2.
Senior citizens worrying about not getting Social Security checks in the government shutdown dropped to 65. Consumer confidence is closely monitored since consumer spending makes up about 70% of economic activity.

Boston remembers 1918 World Series

The Red Sox are back in Boston for game 6 of the World Series leading 3 - 2 in the series. The last time the Boston Red Sox won a World Series in Boston was in 1918...and Babe Ruth was on the team. Fan excitement is reflected in ticket prices. As of 10:00 AM, Tuesday morning, the average price for a ticket to Wednesday night's game had ballooned to $1860. Bleacher seats that were selling for $300 a week ago are now bringing $1100. Stub Hub reports that one sports fan paid $24,000 for two of the best seats for the game.

Flood insurance relief may be on the way

A bi-partisan group of legislators has begun drafting legislation that could stall the implementation of the premium increases called for in the Biggert-Waters Flood Insurance Reform Act of 2012. This delay would also give the Federal Emergency Management Agency more time to review the premiums to be sure they accurately reflect the values needed to make the program self funding. It has been predicted that homebuyers would be hit the hardest under the current structure seeing premiums rise from $6000-$20,000 a year in many cases. Not usually mentioned in the controversy is the fact that FEMA would have to re-draw its flood plain maps, and reimburse homeowners who have paid higher premiums due to incorrect maps in the past. the new rates kicked in on October 1st of this year.

The austere 747 heading into antiquity?

Who will not remember the fist time they saw the airliner 747, the Queen of the skies? This plane is more than 6 stories tall, seats between 380 and 560 passengers, is longer than the Wright Brothers first flight, and has a 6000 mile range. Boeing started building 747's in the late '60s, and more than 1418 have taken to the skies. Technology has caught up and passed the 747. Now, 2 engine planes can navigate the long ranges previously reserved for the 747, and at lower fuel and replacement cost. The Airbus A330 and the Boeing 777 now dominate the long haul routes. Currently, there are orders for just 31 of the current 747-8's version as contrasted with 979 orders for the 787 Dreamliner. The 747 costs $350 million, while the smaller 2 engine planes sell for about $320 million each. Boeing reports that only 18 of the 747's will be built in the next 2 years.

Consumer confidence down 3rd straight month

The University of Michigan reported that its index of consumer confidence dropped down to 73.2 from 77.5 in September. In July, the index hit a 6 year high of 85.1. The study pointed out that many American's feel the government has become the primary obstacle to economic growth. The recent confusion over the debt limit and shutdown has really created a negative attitude in shoppers that may be reflected in poorer holiday sales this year. The study reported that American's expectations for future growth fell to it lowest point since late 2011.

Private flood insurance may ease the pain

Insurance agent Evan Hecht, from The Flood Insurance Agency of Gainesville, Fl. may have some help on the way for people strapped by the new NFIP rate structure. Mr. Hecht stated he started offering policies statewide on Wednesday, and is looking to expand to other states. His agency can offer policies along the Gulf Coast communities in the neighborhood of $2200 vs the threat of costs exceeding $20,000, as predicted possibility in the new NFIP rates. There is some risk in this type of coverage known as surplus lines coverage. If the surplus lines company goes bankrupt, claims do not get paid. Be sure to evaluate your insurance to be sure you have a comfort level you will be compensated if you file a claim.

Pinellas County home sales torrid in September

Single family home and condo sales increased more than +20% in September 2013 vs. 2012. The median price of homes increased + 20.6% reaching $160,000. Cash sales for single family homes were up +7.3% and town homes and condos saw a +17.9% increase in cash sales. A sign of the healthier real estate market was reflected in short sales declining by -28.9% in single family homes and -49.4% in town homes and condos. Low inventories and fewer distressed homes contribute to the price strengthening in home prices.

Flood insurance questions continue

Attending a seminar of real estate industry professionals on Tuesday, 10/22 showed just how much is still unknown about the implementing  the new NFIP rate guidelines. Things like the exact height above the BFE ( base flood elevation ), types of construction, past flooding history, proximity to the water source, and the amount of development between the structure and the water body, all come into play. Small adjustments in any of these items could result in thousands of dollars in either savings or costs. It was noted that 81% of the homeowners in the flood zone areas will not be affected drastically by this new law. The remaining 19% have to be brought into compliance over time. In Pinellas County, there are 45,000 homes to be addressed and 15,000 in Hillsborough. The starting point in the discussion is to establish your home's base relationship to the BFE with an elevation certificate. The cost of an elevation certificate can run from $75 to $250 depending on the company you choose. The better the quality of the elevation certificate, the greater the chance for savings under the new program.

Have you visited an ecoATM lately?

In Sacramento, Calif., there is a kiosk with an ecoATM. Drop in your old cell phone and the machine analyzes its condition and offers you cash back for the phone...on the spot. It is estimated there are  over  800 million  abandoned cell phones in the U.S. This is one approach to start dealing with the problem. Retailers are beginning to offer incentives for old electronic devices, and others are recycling them to be sold overseas in places like Africa, India, and Southeast Asia where there is high demand for used cheaper phones.CellphonesForSoldiers.com recycles used phones and sells them so they can offer our troops overseas free international phone-calling cards. Time to see how many old phones you have and consider recycling them.

Is the DOW headed for a fall soon?

Even as stock prices edged upwards into new high water territory during the debt ceiling debate, there are those who question their fundamentals and their staying power at these high prices. Yale University finance professor Robert Shiller ( Noble Peace Prize winner last week ), and author of the 2000 best seller, Irrational Exuberance, sees stocks getting too expensive relative to their earnings. According to his clinically adjusted price/earnings ratio- he sees stocks are again dangerously overpriced and poised for a fall in the future.

Unemployment claims keep falling

About 3.9 million people received unemployment benefits in the week ended 9/28. This was about 83,000 fewer than the previous week. A year ago 5 million people were receiving benefits. It is hard to sort out the numbers these past few weeks as 70,000 furloughed federal workers and 15,000 private sector employees made application for benefits. Once things get back to normal, the Labor Department expects to see continuing improvement as the economy expands.

Millennial generation sees a home purchase as a good thing

The Pinellas Realtors Organization reports that those folks who make up the Millennial generation ( 32 years old or younger ) have more confidence about a home purchase than any other age grouping. Over 85% of the Millennial generation see a home purchase as a good financial investment. The study also pointed out that 79% of the Millennial generation are first time homebuyers and 65% of them had previously rented a home. This age group is the second largest group of recent homebuyers accounting for 28% of purchases. The Generation X group ( those born between 1965 and 1979 ) accounted for 31% of recent home purchases.

$737.95 vs. $752.24 in 2013

This Christmas, it is estimated shoppers will spend -2% less than last year. That would result with the average shopper spending just $737.95 this year as opposed to $752.24 in 2012. The National Retail Federation has predicted people will pull back on spending money on themselves so they can purchase gifts for others. A survey conducted between October 10 - 13th by the International Council of Shopping Centers and Goldman Sachs found that over 40% of the holiday shoppers have reined in their spending. This survey found that 47% of those making less than $35,000 have cut back the most,  and 32% of those making over $100,000 have also cut back. Fears of the unstable economy, the debacle over the debt ceiling by Congress, and the concern that interest rates may rise have contributed to this poor prediction for holiday spending.

American's adjusting retirement plans

NORC Center for Public Affairs Research discovered in a recent poll that American's are adjusting their retirement plans to include retiring later in life, and continuing to work part time. The poll reported 82% of workers 50 and older say they will most likely remain working in some capacity. Over 47% suggested they will retire later now than originally planned. Those most likely to adjust their retirement plans included males, workers making less than $50,000 annually, parents of young children, racial minorities, and those without health insurance. Associated Press reported these findings.

Foreclosures dip in Florida

Even though Florida's foreclosure rate has dropped -7% in the last quarter, we still lead the nation as their activity has also dropped. There were about 70,000 housing units that had foreclosure activity in the July-September period. Eight of the 10 highest foreclosure rates were in Florida cities. The average foreclosure in Florida takes 929 days. Banks filed about 1,000 Tampa Bay foreclosures in the period, about half their average since 2011.

Florida considers flood self insurance

Over the past 30 years, Floridians have paid $16 Billion in flood insurance premiums and filed less than $ 4 billion in claims. Florida has paid 3.6 times more than it has collected. A nice profit for the NFIP program. Florida policy holders ( 2 million ) make up about one third of all the policies which amount to 5.6 million. It was Katrina and Sandy that dealt such a devastating blow to the program. Florida has been subsidizing the rest of the nation. There are those advocating Florida pull out of the National Flood Insurance Program and self insure with much more modest rates consistent with the actuarial history of Florida policy holder. The Florida Legislature and Governor Scott may consider this option to bring relief to Florida home owners.

Rental housing shortage in Tampa

Vacancy rates in 2012 for all rentals fell from 9.6%  in 2011 to 5.6%. Single family home inventories shrunk from 4.3% to 1.4% in 2012 . Stronger job market, investor activity, a population increase of +2.5% since 2010, and increased rentals by snowbirds have contributed to this situation. Investors are renovating homes as fast as possible to meet the demand.

Credit card debt keeps shrinking

August saw American's cut back their credit card debt for the third month in a row. However, consumers did increase their borrowing by +13.6 billion bringing it to $3.04 trillion seasonally adjusted. Credit card debt dropped about -$883 million to roughly $850 billion. Consumers remain cautious with respect to the economic recovery.

Wearable technology coming quickly

Google glasses were just the start of the wearable technology explosion getting ready to happen...even this year. Americans have used wearable technology for generations in the form of pocket watches, wrist watches, compasses, hearing aids, etc. Last year, wearable technology was estimated at $9 billion and projected to reach $30 billion by 2018. Georgia Tech Professor Thad Starner made this observation about wearable technology..." We're talking about paradigm changing devices, capabilities people haven't thought of before. Unlike computers and tablets, wearables are designed to operate in the background secondary to the wearer's attention."

Millions hit Obamacare websites in first days

In the first few days on line, over 8.5 million people hit the online websites looking for information on Obamacare. The federal call center handled 406,000 calls. Kentucky which expected a low level of web activity ( a few hundred hits ) has actually enrolled 4739 individuals and families by Friday. It has been a similar story across the country.

Call to delay flood insurance changes

Members of a Florida delegation ( both parties ) have proposed delaying the proposed NFIP reforms for one year. There is no question the 45 year old National Flood Insurance Program needs reform so as to move away from the $20 billion subsidy it has been getting. In Hillsborough and Pinellas counties, many of the homes hit the worst are valued less than $130,000 and not even on the water. In Hillsborough, 80% of the affected homes are not on the water. As a Tampa Tribune editorial pointed on August 6th, " This is not about helping the rich, it is about helping thousands of middle class families who played by the rules, but now find themselves with insurance bills they can't afford." Florida legislators are looking for ways to bring relief to affected home owners so they can afford to stay in their homes.

Job growth disappointing

Only 166,000 of the 180,000 expected jobs were added in the economy during September. The revised figure for August dropped from 176,000 down to 159,000 when audited. September was slightly better than August. This is yet again a mixed signal on what is happening in this economy.

Federal shutdown could hamper Christmas retail spending

With so many workers furloughed in the shutdown, retailers are worried they will have the disposable income to spend on Christmas. It was projected spending in the November - December period would rise +3.9% to $602.1 billion. Last year sales increased +3.5% in that period. The importance of this sales period is critical to business as retailers realize about 40% of their annual revenue through Christmas shoppers. Online sales are expected to grow +13-15% in this period.

Utilitiy companies claim solar friendly plans to generous

For the 283,000 solar energy customers getting breaks for alternative energy usage from U.S., utility companies are now being told they need to pay higher fees to support the infrastructure of the industry. In most states, solar energy users can sell back "extra" energy produced into the electric grid. This will lead to less building of new power plants in the future, a key ingredient in utility company profitability. Utility companies want to raise fees, roll back alternative energy friendly rate plans, and equalize the costs of maintaining and growing electric power to all customers. Right now, regular users are subsidizing the solar energy users.

Shutdwon fears drop DOW -128.57 points

Monday, the DOW Jones Industrial average retreated -128.57 points on fears of repercussions associated with a shutdown of the government. Both Standard and Poor's and NASDAQ retreated as well.

Texting while driving unlawful in Florida

Quietly, a new law goes into effect on Tuesday, October 1. It will be illegal to text while driving in Florida. Florida joins 41 other states who have banned texting while driving. If caught, the fine will be $30.00 for the 1st offense and $60 for the second. Unlike other states, the Florida law treats texting while driving as a secondary offense...meaning it is enforced only when it has been observed while committing  a primary offense like speeding, reckless driving, etc. Governor Scott vetoed a $1 million campaign to promote the law thus contributing to low public awareness of its inception. 

Flood insurance nightmares

As many Florida property owners brace for higher flood insurance premiums starting next Tuesday, Oct. 1, legislators from Florida and other coastal states worked overtime to convince Congress to hit the pause button on implementation of the federal Biggert-Waters Act passed last year.
“Florida has paid over $16 billion in premiums to the NFIP since 1978, but the program has paid out only about $4 billion in claims here,” says John Sebree. Senior VP of Public Policy for Florida Realtors,  “Instead of floating the rest of the country, we might be able to rely on the NFIP for mapping and such, and process premiums and payments through a state CAT fund for flood insurance.

Many Floridians are facing catastrophic raises in premiums that could force them out of their homes.

Source: Florida Realtors Organization

Economic update...some mixed signals

The U.S. economy grew at +2.5% in the April-June quarter. There is some concern among economists that growth may be slowing. Another encouraging sign was seen in the number of people requesting unemployment benefits hit its lowest point in 6 years. A survey showed service companies added jobs in August at the fastest rate in 6 years. On the down side, fewer Americans signed contracts to buy homes in August, the third month in a row this indicator has gone down. This indicator had reached a 6 year high in May. Rising interest rates have been cited as a culprit.

Household net worth up +$1.3 Trillion in Spring 2013

U.S. household net worth increased by +$1.3 trillion this spring. The Federal Reserve reports that net worth rose to $74.8 trillion in the April - June quarter. American's wealth bottomed out at $57.2 trillion in 2008. Since then, it has steadily increased to current values. The gains haven't been equally distributed as 10% of households own about 80% of all stocks and have realized the largest increase in net worth.

New home sales bounce back in August

After dropping -14.1% to 391,000. new home sales came back by +7.9% to reach 421,000 when seasonally adjusted.  Keep in mind a healthy market is reached at 700,000 units. The good news seems to be that higher interest rates are not slowing the housing recovery down.

Home prices jump +12.4% in July

Verses 2012, home prices in the U.S. rose +12.4% in July 2013. This is the best showing since 2006. In Tampa, prices rose +2.3% from June to July and +12.6% total. In 15 major markets, prices shrink in their June to July percentage of increase, which may suggest prices are starting to peak. The month over month gains have slowed nationally over the past 3 months. These results were reported by the highly respected Standard and Poor's / Case-Shiller research group.

Florida consumers less optimistic in September

The Florida Consumer Sentiment Index dropped a point to 76 in September. It has risen as high as 81.8 in August. This index measures what consumers expectations about the economy. Poor employment expectations coupled with fewer pay increases over the next 6 months were cited for the lower index result. Business research from the University of Florida releases these results.

Flood insurance real challenge for Dunedin, Fl

The Biggers-Water Act passed in June 2012 takes effect in Florida on October 1, 2013. The effects of this law that requires older homes in flood prone areas to pay higher premiums could devastate the Dunedin homeowners. Any homeowner who purchased a home after June 2012, let their flood insurance lapse, or not using the home as their primary residence will see immediate rate increases. Pam Dubow, Pinellas County Tax Appraiser notes there are 1189 single family homes out of Dunedin's 9,870 single family residences that are pre-FIRM homes...meaning they were built before Flood Insurance Rate Maps were adopted 1970's and 1980's.These 1189 homes are in the high risk flood zones and will see rates increase at much as 25% a year until they reach the new rate structures. This law is painful as homeowners could see a current rate of $2000 a year jump to $10,000 or more.  There is growing concern homeowners may just walk away from their homes if they can not afford the new coverage. This could devastate home values in those affected areas.

Tampa Bay's economy expanding faster than U.S.

In 2012, Tampa Bay's economy grew at a rate of +3.1%, faster than the U. S average growth of +2.5%. In net, 305 of the nation's 381 metropolitan areas has some growth. The leading gainers for Tampa Bay were financial services and trade and professional services.

Florida unemployment drops to 7% in August

Good news and bad news. The unemployment rate in Florida and Tampa Bay fell to 7% in August. The bad news...available jobs fell by -4700. This happens because these two numbers come from two different sources. A year ago, the unemployment rate stood at 8.6% in Florida. Tampa Bay leads the state with jobs creation with 41,700 added in the past year.

Home prices up +23% in Tampa Bay area

The medium price home in the Tampa Bay area reached $160,000 in August, up +23.1% over August 2012. Home prices are lower overall in Tampa vs. the state of Florida, but prices are increasing at a faster rate. The rate for the entire state was +18.6%. In August, the number of existing home sales in the Bay area reached 3468, up 10% from last year.

Mortgage interest rates drop last week

The average rate on a 30 year fixed mortgage dropped to 4.5% down from 4.57% the week before. A 15 year dropped to 3.54% down from 3.59%

USF sets record for research grants

USF hauled in $414 million in research grants and contracts for its best year ever.  Typically placing in the top 50 colleges for receiving this kind of revenue, it separates USF from many other schools in Florida. Judy Genshaft,  President of USF, sets research and innovation as one of USF's four core strategies. Last year, USF took in $411 million in grants and contracts. USF is a very important "economic engine" in the Tampa Bay economy.

Fed to keep buying down lower interest rates

The stock markets took off to new record highs on the news the Fed was going to continue buying up to $85 billion in bonds each month to keep interest rates down and spur economic growth. Two concerns mentioned by the Fed that led to this decision were increasing home mortgage rates ( up over 1% since last Spring ) and conclusive evidence the job market  and economy are approaching full health. To date, the economy and job market results have remained mixed.

Inflation hardly noticeable

The Consumer Price Index hardly moved last month moving up jus +.1% in August. In July the increase was +.2%. In the past 12 months, prices have risen +1.5%...below the Federal Reserves target of +2%.

Bill Gates earns richest man in America award for 20th straight year

Forbes Magazine has identified the 400 richest Americans. Bill Gates led all with a net worth of $72 Billion. He has led for 20 straight years. Warren Buffet came in second at $58.5 billion. Two Tampa Bay folks made the list...Edward DeBartolo, Jr. at $2.6 billion came in at 209th and at 314 came Ronald Wanek at $1.6 billion. Forbes Magazine reported the combined net worth of these 400 people increased to $2 trillion this year, up from $1.7 trillion last year.

The "Man On The Move"...has moved!

Jim Chapman, “The Man On the Move”… has moved to Amerivest Realty as their first agent in the Clearwater market.  Recent additions of agents in Orlando and Daytona by Amerivest Realty heralds an aggressive expansion for this very successful company. Amerivest Realty  has pioneered growth through innovation, and excellence in service. Ranked among the most advanced companies in using Internet marketing, virtual applications, paperless transactions, and innovative branding, Amerivest Realty has grown steadily over the past 16 years. Market leaders in Naples, Sanibel, and Ft. Myers, Amerivest Realty (  http://amerivestrealty.com/  )    offers its agents superb support, lower fees to clients, and a full range of real estate services.  Through my move, I am  branding my practice around myself, integrating social media much more aggressively, enjoying increased earnings, and targeting my practice to the needs of each client.  Visit my Facebook page at https://www.facebook.com/TheManOnTheMoveforyou and leave a comment. Also note the “news and blog” tab. I keep that up to date with daily posts offering quick updates on things affecting our industry and the economy in general.

Florida bridges among best in U.S.

Nationally, an Associated Press study shows there are 65,605  structurally deficient bridges in the U.S. It also noted 20,808 are "fracture critical"  which means if one component of the bridge fails, it could collapse. On the other hand, Florid which has 6,661 bridges has just 17 with structural deficiencies and just 2 that are "fracture critical".  Historically, Florida has invested a lot more in bridge maintenance than they get from national allocation funds. This proactive program is reflected in the good bridges throughout the state.

Credit card debt declinng

Again, Americans' credit card debt declined $1.84 billion ( -2.6% at an annual rate ) in July. This followed a drop of 5.2% in June. This concerns economists as consume spending makes up about 70% of our nation's GDP. There was a bright side, consumers did step up their debt to buy cars, and send their kids to college, etc. This debt grew at a  +4.4% annual rate.

Flood insurance going up +25% annually into the future

If you need flood insurance, get ready to pony up large increases. Many older Florida homes are in low lying, flood prone areas which have never had an elevation certificate. That is all changing as insurance renewals come around. Many older homes have been receiving lower premiums which will no longer be available. These homes will now pay rates more consistent with their risk of flooding. There is no end to future increases at this time.

Senior workers make excellent employees

More and more employers are hiring seniors. Employers doing this cite better attendance, excellent experience base to draw from, less accident prone, and they interact better with other seniors, the largest growing segment of  U.S. population. The historical stereotypes about older workers are being broken down as seniors show employers the value they bring to the job.

Women lead way in job recovery

Women have recovered all the jobs they lost in the recession. In August, 68 million women were employed which exceed their high point of 67.97 million before the recession. Women have recovered more quickly because they find work in healthcare, education, retail stores, hotels, and restaurants. In August the unemployment rate was 6.8% for women while 7.7% of the men were unemployed. Men's jobs are -2.1 million to before recession levels. Since men mostly work construction and manufacturing, these jobs are slower to create without significant improvement in the economy.

Richmond, California takes on underwater mortgages

Richmond, California's City Council voted 4 - 3 to expand a new concept they passed recently  to other cities. The  Council voted on Wednesday to use their power of eminent domain to seize underwater mortgages. Then, they would offer the bank current market value, and create a new loan for the homeowner at a lower payment. The goal here is to help people stay in their homes with a payment they can afford. Banks have filed lawsuits to stop Richmond from moving ahead with this plan...a first of its kind in the country.

Florida foreclosures drop -40% in August

It has been estimated that Florida foreclosure activity dropped by up to 40% in August due to a new Florida  law From June to July, foreclosure volume dropped -70% in Florida. A new law that supposedly speeds up foreclosures is to blame. Lenders must now prove they hold the original promissory note giving them the authority to foreclosure. In the past, banks have been accused of moving ahead with foreclosures without this proof. It is expected foreclosure volume will come back as banks become better equipped to deal with the new legal requirements.

Citizens insurance rate increase softened

Florida's insurance commission allowed Citizens to lower their rate request hike down to +6.3%. This is -1.6% less than originally proposed. Owners who do not live near the water will probably see a +4.4%  increase as opposed to an average proposed increase of +7.3%. These new rates will take affect on January 1, 2014. There are 270,000 customers in the Hillsborough, Pinellas, and Pasco counties cover by Citizens.

3 positive signs for economy

It was reported Thursday that service companies were hiring more people, and layoffs are dwindling. Good job growth numbers are expected on Friday. This comes on the back of 3 positives that include the service sector hiring workers at the fastest rate in 8 years, application for unemployment benefits have dropped to the lower point dating back to October 2007, and last month, U.S. factories grew at their strongest pace in more than 2 years. Unemployment is now down to 7.4%.

Laid off Pilots return to work

United Airlines has called back 600 of the 1437 pilots laid off in 2008 and 2009 when fuel prices were increasing, the economy suffering, and fewer people flying. United has about 12,000 pilots.

43% of Tampa Bay mortgages underwater

RealtyTrac reports that 43% of the Tampa Bay area mortgages are seriously underwater...where the balance on the mortgage exceeds current market value by at least +25%. This is down slightly from a year ago when it stood at +46%. This level of underwater mortgages ties Tampa Bay with Orlando ranked at the 3rd worst market in America for underwater mortgages. People are reluctant to list homes when the mortgage exceeds its resale value. This is hampering sales as people hold their homes off the market. It is estimated it will take about 3 years for underwater mortgages to recover.

Nationally, home prices jump +12.4% in July

CoreLogic, a real estate data agency, reported 99 out of 100 cities saw homes increasing in value this July vs. last July. The Tampa Bay area witnessed a +10.5% increase. Florida in total was up +12.6%.
CoreLogic also reported that nationally home prices had rebounded to the point they are 18% below their 2006 highs. However, Florida's values are still -37.6% below their September 2006 values.

Flood insurance woes on the horizon

An older home, with its lowest floor 6 feet below the base flood elevation, has paid about $2,500 annually for flood insurance. The new rates going into affect could raise the premium to $15,000 annually. Why?  There have been subsidies in place for older homes which did not have elevation certificates that are now being phased out. Congress passed the Flood Insurance Reform Act of 2012 requiring FEMA to eliminate a $20 billion deficit in the flood insurance program caused by disasters like Katrina and Sandy. To meet that requirement, FEMA is removing the subsidy on about 20% of all policies nationwide for home built before 1975. Pinellas Country has the largest number of parcels ( 51,000 ) in the nation affected by the law. Hillsborough and Sarasota counties are in the top 12. As people try to renew their policies, they will be required to get an elevation certificate...and their rates  may skyrocket. With home sales up +9% this year along the beach, this change in flood insurance premiums could be catastrophic for home sales.

5400 New Tampa Bay Homes ( Good News and Bad News )

New home sales are expected to reach 5400 units in 2013, +31% over last year. That's the good news. The bad news is the market is only at about 40% of what it was selling in good years...9000+ units.  In 2005, during the crazy times, builders closed on over 25,000 units. Pinellas County has issued 399 new home permits this year, double last year's total. Lennar leads all builders with 485 closings so far this year in the Tampa Bay area. In Florida, there were 356,000 construction workers, down by 50% over the boom times. Skilled trades are critical to a growing housing market.

Consumer spending slows in July

Consumers in the U.S. hardly increased their spending in July...up just +.1%. In June, the growth was +.3%. Contributing was the slower growth of incomes affected by deep government spending cuts affecting federal workers. Over all, wages and salaries dropped -$21.8 billion from June. This slowdown in consumer spending suggests the 3rd quarter's growth may be slower than expected. Consumer spending makes up about 70% of economic activity, and plays the major role in economic growth.

Economy's growth spiked to +2.5%

The economy grew at an annual rate of +2.5% in the April- June quarter. This was well ahead of the earlier estimates of +1.7%. This +2.5% growth was more than twice the growth of the January-March quarter and points to continued recovery. The economy is still performing below estimates for 2013.

Unemployment benefits at lowest point in 5 years

Applications for unemployment benefits dropped by 6000 this past week to 331,000 seasonally adjusted. This approached the lowest level since November 2007. At the depth of the recession in March 2009, unemployment benefits reached 670,000.

Atlanta Federal Reserve President predicts recovery will continue

Dennis Lockhart, President of  the Atlanta Federal Reserve Bank expects economy to keep growing. He does not see rising interest rates adversely affecting the housing recovery. He predicts job growth will lumber along at the marginal rate of 170,000 - 200,000 jobs a month. The world is watching to see what happens at the September 18th  Feds Open Market Committee meeting where interest rates are affected by the Feds buying $85 billion of bonds monthly. The committee may recommend this be cut back. Lockhart noted that there are highly skilled jobs, and low skill income jobs available in the economy. Unfortunately, jobs are scarce for the large middle class.

Home prices approach 7 year high

The Standard and Poor's/Case Shiller 20-city home price survey reports homes are approaching their highest price in 7 years. They report the year over year gain at +12.2%, the highest level since March 2006. Home prices in Las Vegas soared +24.9% and San Francisco was up +24.5%. Markets that were hit the hardest are showing the largest gains coming back to pre-recession pricing.

Durable goods orders down in July

The Commerce Department reported that durable goods orders declined by -7.3% in July, the steepest drop in nearly a year. Demand for commercial airliners, computers, and electrical equipment were all down.

New home sales drop -13.4% in July

The annual rate of new home sales dropped to 394,000 ( down -13.4%) in July according to the Commerce Department. This was the worst showing in the last 9 months.  In June the annual rate was 455,000. A  healthy new home market is reached at 700,000 homes. Higher interest rates have been blamed for the  drop. The total market is still up +7%  in the past 12 months.

Mortgage rates rise to highest level in 2 years

The rate for an average 30 year fixed mortgage rose to 4.58%, up from 4.40% a week earlier. This is the highest rate in the past 2 years. A 15 year fixed rose to 3.60% from 3.44 a week earlier. Both averages have risen more than a point since May. Speculation that the Federal Reserve may slow its bond purchases ( which help keep interest rates down), as early as September, are fueling the rise in interest rates.

Tampa Bay housing prices and sales soar in July

Housing sales increased +22.5% and prices rose +27% in the Tampa Bay area in July 2013 vs. July 2012. The Florida Realtor trade group on 19 markets inside Florida and Tampa Bay was at the top.
The number of closed sales in Tampa Bay was 3534 in July. Rising prices were influenced by a higher number of higher priced homes selling. In July 2013, 127 homes sold for less than $50,000 as opposed to last year's 178 homes. This year 191 homes sold for $300-$400,000 vs. last year's 124 homes. This skew to higher priced homes, and low inventories putting upward pressure on prices may be the contributing factors pushing the median price up to $165,000, + 26.9% over last year.

Job market may be slowing down

The Labor Department reported Monday that unemployment  rates increased in 28 states. They remained unchanged in 14 states and fell in 8 states. Hiring increased in 32 states ( July vs. June). Nationally, employers added 162,000 jobs, the fewest since March. The unemployment rate dropped to 7.4%, a 4 year low. Over the past 12 months, western and southern states have seen the largest job growth. Nationally, hiring has been steady this year until this dip in July.

Fannie Mae rates 1 point higher this year vs. last

Last week, Fannie Mae mortgage rates were at 4.04% up form 3.03% a year ago. Rates have been holding steady, moving in a narrow range just about 4%. These are still a very attractive rate compared to historical interest levels.

Sluggish retail sales a real concern for the eonomy

Macy's reported lower than anticipated results, the first in 24 months of exceeding expectations. The poor second quarter results also saw Macy's lower their projections for the rest of the year. Walmart issued lackluster results in their report as well. Consumers spending was up +1.8% in the April-June quarter, but fell behind the first quarter results of +2.3%. Concern for this area of the economy's growth is valid since 70% of the economy's growth is fueled by consumer spending.

U. S. Homebuilders giddy

The National Association of Homebuilders/Wells Fargo building sentiment index topped 59 last week, the highest level in 8 years. In July the index was at 56. This optimism is expected to drive strong sales into next year.

Unemployment claims drop for 5th week in a row

The number of Americans seeking unemployment benefits dropped -15,000 last week to an annual rate of  320,.000...the lowest rate since October 2007. The 4 week average declined by -4,000, dropping down to 332,000, the lowest since November 2007.

Florida tourism booming

Florida tourism is booming with 23.4 million visitors coming here in the second quarter. in the first half of 2013, Florida has welcomed 49.6 million visitors , +4.6% over 2012. The spending of these visitors has been estimated at +$33.2 billion during the January-May period, +5.5% vs 2012.

Tampa home sales & prices up nicely in 2nd quarter

The Florida Realtors trade group reports home sales increased +18.2% over last year in the 2nd quarter. Volume reached 10,472 units in Tampa for the 2nd quarter. The median price of a home increased to $ 154,000, up +18.5% over 2012.  

Florida home prices rise +12% in June

Floridians saw their homes jump almost +12% in value over the same time last year. Nationally, homes increased +11.9% in 48 of the 50 states, CoreLogic, a real estate data provider reported this week. Prices declined only in Delaware and Mississippi. Nevada led the upward movement with prices rising +26.5%. Other strong showings occurred in California +21.4%, Wyoming +16.7%, Arizona +16.2% and Georgia at +14.3%. Mark Fleming of CoreLogic stated that home prices are moving upwards at a faster pace than 1977. Nationally, Florida was second from the bottom when measuring home values at their peak, which was lost during the downturn at -38%. For the year, home values across the country have increased +10% during this recovery.

President Obama promotes mortgage reform

President Barrack Obama presented ideas for mortgage reform at a rally in Phoenix. His major revision would be phasing out Fannie Mae and Freddie Mac which received  $187 billion from the stimulus package The push is to make private lender share more of the risk rather that the government through Fannie and Freddie. The government would still be involved in oversight and as a last resort loan guarantor. His proposals are consistent with the recommendations of Democratic Senator Mark Warner, a Democrat, and Senator Bob Corker, as Republican who have been working together to bring reform.

19 new hotels possible for Tampa

The Plasencia  Group, a Tampa based hospitality firm, noted there could be as many as 19 new hotels coming to the Tampa - St. Pete - Clearwater area in the near future. Over 1000 rooms are planned for four sites in Hillsborough County. This is more growth than the area has seen in the last 15 years.

Job growth lackluster

U.S. employers added just 162,000 jobs in July, the fewest since March. It has been noted that the slow economic growth and a lack of consumer spending is making employers weary to hire.

Interest rates softening again

The average rate on a 30 year fixed rate mortgage dropped to 4.31% down from 4.37% the week before. Two weeks ago, interest rates reached their high of 4.51% which was a 2 year high. The average on a 15 year loan dropped to 3.39% down from 3.41% the previous week.

Unemployment benefits rise faster in Florida

Agriculture, construction, wholesale and retail trade all saw higher layoffs this past week in Florida. Unemployment benefits rose nationally by 7,000, following a drop of 22,000 the week before. Florida accounted for 3073 of the increase.

New home sale soar

In June, Americans purchased new homes at the fastest rate since January 1992. Sales rose +8.3% to an annual rate of  497,000 units ( up from 459,000 in May). This is still well below the 700.000 unit level that supports a consistent new home market. New home sales have risen +38% in the past 12 months.

Housing prices in Tampa Bay rise +18.7% in June

The housing market in June remained strong in June coming off a torrid May. The area recorded 3440 closed MLS sales ( not counting FSBO's and Foreclosures no listed in the MLS).That was up +11.1% over last year. The median price of a home improved to $158,500, up 18.7% over June 2012.
Cash sales backed off to 43.5%,  trending downward every month since January when cash sales amounted to 50.8%. This may suggest rising home prices are taking investors out of the market as their ROI formulae become unattractive at higher market prices.

Economists predict continued economic growth in 2013

Over 72% of economists polled believe the economy will continue to grow for the balance of the year. Nearly 30% of the economists polled reported higher payrolls at their companies. Month to month job growth seems to support their confidence in the improving economy.

Home sales a little softer in June

Sales activity declined by -1.2% in May to an annual rate of 5.08 million vs. 5.14 million in April. The good news is this was +15.2% above May 2012. The average interest rate had increased to 4.46% by the end of June, up from 3.81% at the end of May. Last week, the rate was 4.37%. It is important to note that home sales are still at a 3 1/2 year high.  

Tampa Bay house flips up +32%

House flipping is alive and well in the Tampa Bay area. This year, 2673 homes have been flipped which is +32% higher than last year and +74% higher than 2011. If homes were not rising in price, and rents increasing, investors who purchased with the intent to flip, are holding on and renting instead to take advantage of these increases. With inventory levels in the Tampa Bay area down around 2.8 months, there are fewer and fewer homes available to flip.

Home builder's optimistic

For the third straight month, the National Association of Home Builders/Wells Fargo builder sentiment index rose to 57 from 51 in June. The index last reached this level in January 2006. Sales of new homes jumped to the annual rate of 476,000 in May, the fastest rate in 5 years, up 29% from a year ago. An annual rate of 700,000 is considered healthy.

Signs of economy weakening

The economy seems to be weaker than many economist thought. In June, Americans bought more cars, trucks, furniture, and clothes. However, they spent less at restaurants, on electronics, and home improvement. Core retail sales rose just .15 percent in June, the smallest rise since January. Core sales ( building supplies, gasoline, and autos ) are considered the "driver" of economic growth. This slow down in June could mean this quarter will trail the growth of the last quarter which was at 1.8%. 

Retail sales jump +3.9% in June

Retail sales increased +3.9% over June of 2012. This is the important back to school shopping season.  Shoppers took advantage of summer sales, nice weather, and the improving economy to push sales higher.

Government must justify impact development fees

The Supreme Court handed down a landmark ruling that will help landowners across America. Check it out at this link:

http://video.foxnews.com/v/2532128810001/supreme-court-ruling-is-victory-for-fla-landowners/?intcmp=obnetwork

Bernake to continue FED's policies

Ben Bernanke, Chairman of the Federal Reserve  told the National Bureau of Economic Research that the lingering unemployment situation remaining high, and the rate of inflation below the FED's target, are reasons to continue having the FED help. He noted the economy is being held back by higher taxes and federal spending cuts.

Tampa Bay still has 6th highest foreclosure rate

RealtyTrac, a real estate research firm, reports fewer people are losing their homes to foreclosure. Even though they are declining in the Tampa area, Tampa Bay still ranks 6th in foreclosures. In fact,
five of the six areas on top of the national list are in Florida. Miami, Jacksonville, Ocala, Orlando, and Akron, Ohio claimed the first 5 spots. This years figures show that 1 in every 122 homes (Tampa area ) were involved in the foreclosure process. There were 11,075 homes who received some kind of foreclosure  notice during the second quarter. The good news is this was -17.9% below the first quarter. Florida takes longer to deal with distressed properties that other states.

Who will gain the most in this rising real estate market?

An editorial in the July 9th Tampa Tribune warns that the upward trends in the housing market are being driven by the affluent 1% and investors. There is concern the market is being manipulated for quick profits, a familiar problem a decade ago. Rising home prices ta may take investors out of the market. Home equity has always been an important part of building a nest egg for seniors, and providing capital for trading up with younger home owners.

Interest rates retreated

After the strong surge upward last week, the average rate of a 30 year fixed mortgage fell back to 4.29%. That is down from last week's rate of 4.46%. Fifteen year mortgages fell back to 3.39% from 3.5%.

Tampa Bay home prices up in May

CoreLogic report reports that home prices were up +9.6% in the Tampa Bay area vs. the same time last year. Nationally, prices increased +12.2%. Nevada lead the way with homes jumping +26%, followed by California ( +20.2%), Arizona (+16.9%)and Hawaii at +16.1%.

Interest rates soar last week

U.S. mortgage  rates jumped to 4.46% according to Freddie Mac. That is the highest  jump in 2 years and almost a point higher than last month. Rising rates could price some people out of the market.

Unemployment benefit filings drop last week

The number of people filing for unemployment benefits dropped to 346,000 last week, down from 355,000 a week ago.

New home sales best in 6 years

The National Association of Realtors reported orders for new homes sales rose +6,7% in May. This was +12.1% than last year and the highest level in 6 years.

Renewable energy moving into #2 position by 2016

Emerging third world countries are building more wind, solar, and hydroelectric plants. It is estimated by 2016, these alternative energy sources will surpass natural gas as the second largest source of electricity. Coal continues to be the largest fuel for electric generation.

Stock market rallies

News that the economy grew at a slower pace than reported did not dampen enthusiasm on the stock market on Wednesday. The Dow jumped 149.83 reaching 14,910.14. All sectors increased being lead by health care and utilities. This was the second consecutive day of increases.

Ist Quarter growth lower than reported

The Bureau of Economic Analysis reported Wednesday that real economic growth was and anemic
1.8% not the 2.4% reported by the federal government. Consumer spending was lower at 2.6% growth from the previously reported at 3.4%. New tax withholding this year are credited with some of this lower spending. Consumer spending makes up 2/3 of the GDP.  Business investment grew at just .4% in the first quarter contributing almost nothing to growth.

Interest rates jump more than quarter point

Those below 4% interest rates have left the scene. Last week, 30 year fixed rate mortgages were seeing rates between 4.625% and 4.75%. These are some of the largest increases in interest rates ever recorded. This is the current picture:

  

                                           30 year fixed = 4.625%

                                           FHA/VA        =  4.25%

                                           15 year fixed  = 3.625%

Rates may vary regionally and through competition.

Where are interest rates headed short term?

There is no unanimous agreement on where short term interest rates are headed. Spokesman for the industry predict they might go up, while others see them remaining steady, and a few even see them going lower. We have been in a period of historically low rates. If you have been sitting on the fence about a purchase or refinancing a mortgage, now may be the time to act.

Interest rates to rise per Bernake

Chairman  Ben Bernanke informed the country to look forward to higher interest rates. Last week,
30 year fixed mortgages rose to 3.98% from a low of 3.31%. This is the highest rate in a year.

Unemployment applications rise last week

Last, 18000 more people applied for unemployment benefits than the week before. The annualized rate was 354,000. This level is consistent with continued job growth.

Pinellas County sales strong in May...+22.8%

Pinellas County is enjoying a robust market. Sales in May up +22.8% over last year, listings up +16.6%, average sales price up +7.9%, and sales occurring at 94.5% of list price. Inventory is down by -12.7% to less than 4.5 months supply. With distressed homes removed,  the figure is closer to 2 months supply.

Home builders bullish

Home builders are the most confident they have been in 7 years with respect to new construction sales. The National Association of Home Builders/ Wells Fargo builder sentiment index spiked to
52 percent from 44 last month. The index hasn't been this high since April 2006.

57 Million visit Orlando in 2012

The number of visitors to Orlando reached an all time high in 2012. Over 57 million visited. Of note, Visit Orlando officials claimed at least 4.1 of the visitors were international travelers. Visitation dropped to a low of  46.6 million in 2009, and this year the record surpassed 2011 which had 55.2 million visitors.

Retail spending up in May

People spent more in stores, for cars, home improvements, sporting goods, etc. in May. Sales increased +.6%, up  +.1% from April. This is the best pace since February.

Unemployment benefit seekers lower

People applying for unemployment benefits dropped by -12,000 last week to 334,000. This continues to suggest job growth continues.

CEO's see slow economic recovery continuing

About 1/3 ( 32%) of the CEO's heading up American companies expect to hire more people in the next 6 months. Over 78% said they expected an increase in sales. These CEO's are members of the Business Roundtable group. Recovery is expected to hover around +2.2% growth ( now +2.1% ), well below the +3.5 to 4.0% needed to obtain a robust economy. Consumers continuing to spend in light of the rise in Social Security taxes has helped keep the modest recovery going.

Housing market still precarious

It was reported this week by CoreLogic, a real estate research firm, that the Tampa Bay area is near the top of the largest 25 metropolitan areas in underwater mortgages ( the property is worth less than the value of the mortgage ). Over 41.1% of all mortgages in the Tampa area are upside down. This is an improvement against the last quarter's 44.4%. There are 255,925 upside down mortgages in the Tampa area. Nationally, 19.8% of mortgages were upside down in the first quarter, as opposed to 21.7% in the 4th quarter of 2012. The rise of institutional investors seeking rental properties seems to have banks releasing more distressed properties to meet the new demand. Some refinancing programs the government's HARP program are helping upside down owners to lower their payments and keep their homes. The real estate market continues moving ahead as these items sort themselves out.

Corporate buying spree... a challenge in the housing market

Would-be homeowners are facing even more challenges than  low inventories and rising prices. Corporate investors are gobbling up homes in the $150-$300,000 range to convert into rentals. The corporate buyers represent large hedge funds and institutional buyers who are paying good prices, in cash, and closing in as little as 20 days. Many times, the home is purchased by an investor before it even gets listed for sale. This market pressure, along with low inventories, is causing home prices to accelerate quickly. Some speculate this activity by these cash laden investment companies could cause a new real estate "bubble". The growing rental market is creating this appetite for homes. Blackstone Group, a private equity firm, is reported to own 29,000 homes nationally. MLS data for Tampa suggests they own 928 homes in the Tampa area, worth $131 million.

More people quitting their jobs

An increasing sign of confidence the job market is improving is found in the number of people quitting their current job. The labor Department reported this week that the number of people quitting their jobs in April rose +7.2% to 2.25 million. Most people quit their jobs when they feel they can find a new job quickly. The job market is far from healthy, but it is slowly recovering.

Housing discrimination diminshed

The Housing and Urban Development agency sent out people to test for discrimination in the housing market. It was found out that minorities have more access to homes, and neighborhoods, than was the case when a similar 1977 study reported blatant discrimination and door slamming in the faces of minorities. More than 8 million tests, in 28 metropolitan areas confirmed these results.

Florida economy strengthening

Florida’s economy is growing at a faster rate.  Florida’s gross domestic product grew at 2.4 percent in 2012, a marked improvement from 2011.  Experts predict 2013 figures will be much stronger after the state’s impressive job creation so far this year.

 

Florida consumer confidence hits post-recession high.  Floridians’ consumer confidence rose another 2 points in May to 81—a third straight month of increases for a post-recession high, according to a University of Florida survey.

 

Floridians’ trust in the national economy over the next 5 years surged, rising 8 points to 85.

 

Applications for building permits rose nationally in April to the highest level in nearly 5 years. 

 

New home sales up near record: 2.3% in April.  Sales of new U.S. homes rose in April to the second highest level since the summer of 2008, while the median price for a new home hit a record high.

 

Total existing-home sales are expected to rise just over 7 percent to about 5 million this year in the U.S., according to NAR Chief Economist Lawrence Yun.

 

U.S. home prices jumped in April by most in 7 years.  U.S. home prices increased 12.1 percent in April from a year earlier—the biggest gain since February 2006.

 

The 20-city Standard & Poor/Case-Shiller home price index considers two Florida cities for its results – Miami and Tampa.  In Tampa, S&P/Case-Shiller found an 11.8 percent year-over-year price rise.

 

Statewide, home sale prices improved again by $5,000 to a median price of $165,000.

 

“Rising home prices may begin to alleviate a lack of housing inventory….by encouraging more homeowners to put their properties on the market,” said Maninder Sibia, an economist with Economist Advisory Service.

 

Reported in weekly Prudential Tropical Report by Dewey and Allen, owners.

Wealthy go frugal

Wealthy folks are shunning more expensive discretionary items. A Luxury Institute survey suggest wealthy people will rein in spending on luxury things and seek experiences that create more personal satisfaction. These experiences include travel and dining. People are taking exception to the high price tags on designer items. In a study of 500 pentamillionaires, ( net worth exceeding $5 million), 80% ( 4 out of 5 ) say that pricey designer items have lost their attraction.

Employers create +175,000 new jobs in May

Employers added 175,000 new jobs in May. This was not enough to keep the unemployment rate from rising to 7.6% from 7.5% in April. The stock market took this as a good sign and rose over 207 points on Friday, 6/7.  Employers have added an average of 155,000 jobs each month over the past 3 months. This is continuing evidence the economy is in recovery mode.

Twinky nightmare almost over

Publix Supermarkets has announced it will begin selling Twinkies again as of July 15th. Twinkies disappeared last year when Hostess Brands went out of business. Flowers Foods bought the rights to Wonder Bread, Cup Cakes, Ho Hos, and Ding Dongs. They look to resume production on those brands in late summer. Twinkies left over from last year are fetching between $6 and $11 on Ebay for an 8 pack.

Stock market "uneasy" with economy

Weak economic signals have fueled a drop of -217 points on Wednesday. Mortgage applications dropped -11.5% last week, weak hiring reports in private companies, and sluggish orders to U.S.  factories. The DOW closed at 14,960...the first time below 15,000 since May 6th. There has been a lot of talk lately that the stock market is due for a "correction" following this sustained run to 15,000+.

Tampa home prices up +10.4% in April

The CoreLogic real estate firm reported housing prices in the Tampa area increase +10.4% in April vs. April 2012.  Nationally, prices increased +12.1%. Los Angeles and Phoenix saw gains exceeding +19.2%. These are the biggest gains since February 2006.

Auto sales bounce back in May

After a slightly disappointing April, auto sale bounced back increasing +7% over May 2012. Nissan lead the way with 114,000 units, up +25% vs. May 2012. Altima sales rose 41% and the new Pathfinder volume quadrupled. Toyota sales increased +2.5% to 208,000 units. The housing recovery is creating heavy demand for pick ups. Ford reported their F series pickups hit 71,604 units, the highest levels since March 2007. Dodge Ram sales increased +22%. Analysts expect June sales to hit 1.4 million units reaching an annualized rate of 15.5 million.

Tampa loves small business

Tampa ranks 9th in the country as a good place to locate a small business. CardHub.com  released a study on 6/3 of 30 metropolitan areas ranking 10 factors. These included things like the number of small businesses per capita, unemployment rate, variety of small businesses, and cost of living. Miami and Orlando ranked 11th and 12th respectively. The three worst places were Sacramento and Riverside California and Detroit

10,000 more seek unemployment benefits last week

The number of Americans seeking unemployment benefits rose by 10,000 last week to 354,000. However, this rate of applications is till consistent with steady hiring. These numbers remain at
a 5 year low.

Economic growth picks up in first quarter

The economy grew at +2.4% the first quarter. This was below the 2.5% expected, but still well better than 4th quarter growth of  0.4% in the October-December 2012 quarter. Economists expect growth to continue to improve to 3.2% next year. For the balance of this year, it is expected to remain at its current pace.

Banks post record quarterly earnings

The first quarter of 2013 saw banks reporting $40.3 billion of income, up +15.8% from 2012. Earnings  resulted from higher fees and fewer losses on bad loans. The large bank conglomerates continue to report record results while smaller regional and independent banks continue struggling.

Consumer confidence takes leap

Consumer confidence in May jumped to 76.2, up from 69 in April. This is the highest since February 2008. Rising home values, a rising confidence in the economy, better employment numbers, and a robust stock market are encouraging consumers. Among wealthier Americans, the confidence index jumped to 95.1 from 85.3 in April. Supporting this feeling of confidence has been the rally of the stock market that has replaced the $16 trillion in wealth that people lost in the Great Recession.

Encouraging signs for summer travel

The Associated Press has forecast an improving picture for summer travel this year versus last. Growth will be steady as the recovery continues. Some of the things they note are:

-  gas prices are about the same as last year
-  domestic air line tickets on average are down $6.00 from last summer
-  Amtrak's average one way ticket is an affordable $66.39
-  Hotel rooms are up +4.4% from last year, but Luxury hotels are selling out.

Many vacationers will stay closer to home to keep costs down. Travel plans mirror the current state of the economy. Airlines, hotels, and campgrounds are seeing more customers than a few years ago. Even with this slight improvement, the vacation industry will not see the blockbuster crowds of 2007.

Tampa Bay area home sales soar +24.5%

A Florida Realtors study posted increased sales of  existing homes at +24.5% this March vs. March 2012 reaching 3401 units. The median price rose +13.9% to $143,000. Townhouse and condominium sales rose  +16.1% to 1363 units. Prices increased +16.4% bringing the median price to $96,000.

Sales of existing homes hits 3 1/2 year high

The National Association of Realtors announced on 5/22 that sales of preexisting homes in April
 hit an annual rate of 4.97 million homes, up from 4.94 million in March. Home sales have risen +9.7% in the past 12 months. The median price has jumped to $192,800, up 11% in the past year.
Buyer traffic is up +31% over the past year. Currently there is less than 5.2 months inventory on hand which is below the average of 6 months. In some areas, the supply of "move in condition homes" is less than 3, months and is pushing prices up even faster in those areas. All in all, the housing segment seems to be back doing what it has historically done...lead the country out of recessions.

Unemployment applications down -23,000 last week

Last week, applications for unemployment assistance dropped to 340,000 from 363,000 the week before. This is an indication the economy continues creating jobs, but we are still -2.6 million below in the number of jobs that existed in December 2007 when we were headed into the recession.

Economists see consumer spending rising this year

The National Association for Business Economics sees consumer spending rising +2.3%, up from +1.9% last year. They report that consumers are more inclined to spend as the housing industry improves along with the general economy.

Amercians paying down credit card debt faster

The amount of credit card debt over 90 days old fell to .69 from .85 vs. a year ago. TransUnion reported this 19% drop. It was noted that during this time of year, people will use income tax refunds to help payoff their debt.

Upward pressure on home prices

We continue to see prices rising due to low inventory levels and low interest rates. We are seeing well marketed homes selling very quickly. The influx of 5 corporate buyers seeking rental properties is putting even more pressure on the Pinellas County market. If the home was built after 1995. in a good location, is at least a 3/2 with just moderate fix up costs, they are getting offers from these investors before the home ever gets to the public. These investors have let the real estate community know they are a strong buyer and would like the opportunity to see these homes before the listing goes public. This is the reason you see homes go on the market for one day...to get the sale registered in the MLS service.

Tampa Bay new home construction surges +50%

The sound of hammers are increasing throughout the area as new home construction increased +46.2% in the first quarter of 2013. This year builders started 1480 single family units as opposed to 1.012 last year. It is now expected that builders will start over 6000 new homes in the Tampa Bay area this year.

Florida residents on the move

Seventy percent of Florida residents plan on taking a trip of 4 days or more between May and September. That is +5% greater than a year ago. Last summer, Pinellas County drew 325.000 of the 1.6 million Floridians traveling over night. More are expected this summer.

Inflation held in check

Lower fuel and food costs reduced wholesale prices in April by the most in three years. The producer price index dropped -.7% in April from March.

Travelers pay airlines $6 billion in baggage and change fees

U.S. Airlines hit passengers for over $6 billion worth of baggage and change fees in 2012. The nation's 15 largest carriers collected a total of $3.5 billion in bag fees. The airline industry had revenues of $159.5 billion and expenses of $153.6 billion. Their 3.7% profit margin came from charging these fees. On top of an average of $35 per bag, major airlines recently upped the cost to change a ticket to $200. In addition to these fees, airlines are also charging fees to have more legroom, skipping security lines, and eating premium meals.

Small business more optimistic

The national Federation of Independent Business reported their Index of Small Business Optimism increased +2.6 points in April to 92.1. This overcame a -1.3 drop in March. The index has averaged 90.7 since the recession. Small business is a little more optimistic.

Mortgage interest rates continue at all time lows

The average rate for a 30 year fixed mortgage rose to 3.42%  from 3.35% the week before. The all time low is 3.31%. These low rates are spurring the housing recovery.

Fewer apply for unemployment benefits

Last week, applications for unemployment benefits declined by -4000 to a seasonally adjusted 323,000. The Labor Department reported the 4 week average dropped -6.250 to 336,750... the lowest level since November 2007.

Fannie Mae posts record profits

Fannie Mae reported a first quarter profit of $8.1 billion. Fannie Mae will also pay the Treasury Department $59.4 billion. Profits are being driven by rising home prices and declining delinquencies.

Labor shortage hurting housing starts

The National Association of Home Builders is reporting a shortage of skilled labor for the home building industry. There is a shortage of framers, roofers, plumbers, and carpenters. The shortages are worst among the states that have been the first to rebound...Arizona, California, Texas, Colorado, and Florida. Home builders are reporting delays, shortage of building materials, and even the need to turn down jobs. A side effect of the shortage is the higher pay being demanded by those available to work. Builders have been gradually raising prices with the median home price reaching $247,000 in March, up 12% from March 2011 as an offset to higher material and labor costs.

Tampa area foreclosures down -18% in March

RealtyTrac reported that 3508 homeowners in the Tampa area received some kind of foreclosure notice in April. Only 1225 were first time foreclosure notices. In 2012, there were 4300 notices. Even with the decline of some 800 notices, the ratio of 1 in every 384 homeowners getting a foreclosure is still one of the highest foreclosure rates in the country.

Freddie Mac reports earnings

Freddie Mac reported $4.6 billion in earnings for the January-March quarter. Freddie Mac also announced it will pay a $7 billion dividend to the U.S. Treasury next month. For the 4th straight quarter, Freddie Mac will not ask for federal aid.

Limited housing inventory helping push prices up

Florida saw an +8% increase in home prices in March vs March 2012. Nationally, prices were up +10%. Nevada led all states with a +22.2% increase.  88 of the largest 100 cities all reported price gains. California (+17.2%) and Arizona (+16.8%) followed Nevada.

Stock Market sets new milestone

The Dow Jones Industrial average closed over 15,000 for the first time in history on Tuesday, 5/7. The final figure was 15,056.20 on the strength of an advance of +87.31 points that day. James Paulsen, chief investment strategist at Wells Capital Management observed that job creation and the housing market have done better than expected and is fueling this stock market activity. Good news came out of European markets and a rebounding German economy and good earnings reports from Direct TV and Fossil watches doing better than expected.

FEDS help hold inflation down

The Personal Consumption Expenditures (the Fed's favorite gauge of inflation) for March showed that inflation continues to remain tame. This likely influenced the Fed's decision in last week's meeting of the Federal Open Market Committee (FOMC) to continue purchasing $40 billion a month in Mortgage Bonds and $45 billion in Treasuries. The program should last through this year and could spill over into the beginning of 2014.

Dow soars over 15,000 on good job news

The DOW went through 15,000 for the first time in history on a good jobs report. The Labor Department revised upwards its estimates of job gains in February  and March. It now states that employers added 332,000 jobs in February and 138,000 in March. The combined difference added 114,000 more jobs than originally projected. From November through April, the economy has been adding about 208,000 a month. On this growth, the unemployment rate has dropped -.4% since January, now down to 7.5%. The one negative in these numbers is that most  jobs being created are in the lower paying segments such as hotel restaurants +45,000 jobs, retail +29,000, and temporary help positions + 31,000.

Cars sales "truckin" in April

Ford, Chrysler, GM, and Nissan all reported double digit increases in April sales. Pickup trucks lead the growth rate. Ford was up +18% with their F-150 pickup increasing +24%. Chrysler sales rose +11% with their Ram pickup sales up +49%. GM was also up +11% with their Chevy Silverado pick up increasing +28%.

FED blaming politicians for slow economical growth

The Federal Reserve cautioned political leaders their policies are holding back growth in the economy. Jess Naroff, chief economist at Naroff Economic Advisers observed the private economy is moving ahead, but government is putting roadblocks in the way. The FED continues to keep it interest rates at this low point until unemployment gets down to 6.5%. The FED is also buying $85 billion in Treasury and mortgage bonds to hold long term interest rates down and foster investment.

Consumer confidence up in April

An increase in consumer confidence during April reversed the negative index registered in March. Consumer confidence rose to 68.1 from 61.9 but is still well below the historical average of 92. A separate report by Case-Schiller showed home prices were up 9,3% from a year ago...the best showing in seven years.

Pitfalls to selling your home

Even though we are in a stronger housing market, and many listings are getting multiple offers, some listings just sit on the market. I takes about 90 days, on average, to sell in today's market. The single largest contributor to a slow sale or no sale is unrealistic pricing by the seller.  Market savvy buyers are well informed on pricing and will not "bite" on the sellers "hopeful" pricing. In many cases they will not even visit an overpriced home. Having a qualified real estate agent properly position your home in the right price range is critical to the selling process. Here area few other things that can hamper the sale of your home.

Imposing severe restrictions on when and by whom the house can be shown. For example, sellers who will only allow showings between 10 a.m. and noon on Saturdays, or who require a 24-hour advance notice before appointments to show during the week, or who won't let anyone in unless they or the listing agent are present, inevitably delay offers and sales.

 

Other big turnoffs:

·        Poorly cleaned, messy houses with obvious deferred maintenance.

·        Sellers who insist on being present — or hover nearby — when shoppers visit so they can point out every feature they improved or like. Better for sellers to be out of the house or out of sight.

·        Smells inside the house that are either bad — especially from dogs, cats and other pets — or come across as contrived, such as scented candles, potpourri plug-ins, etc.

 

 

Apartment market booming

Apartment complexes are sprouting up all over the Tampa Bay area. Right now, plans are in the works for 10 new complexes. The 311 unit NoHo Flats bordering downtown Tampa, is an example
of what is happening.  Fueling this building boom have been people making short sales and then being forced to rent until their credit can be restored. One out of every 5 sales these past few years has been a short sale. Lower paying jobs, and higher rents, are reflected in the statistic that 49.3% of renters pay more than a third of their income in rent. The average rent is about $900 in the Tampa Bay area. Recently, many institutional investors have begun buying up homes and turning them in successful rental units. They see the financial return on these rentals much more attractive than the low paying money markets. Downtown Tampa now boasts 5000 inhabitants vs. just a few hundred 10 years ago.  

Strong U.S. Growth rate at 2.5%

The U.S. economy grew at +2.5% in the January-March quarter, up from the anemic growth rate of +.4% in the October-December 2012 quarter. Consumer spending increased +3.2%, the best showing since the end of 2010. Most economists are projecting the growth rate will slow in the April-June quarter to +2.0%. Had government spending not be down by -4.1%, the economy may have reached the growth rate of +3% where many economists think the second half of 2012 will achieve.

Confidence up in job market

Americans are gaining confidence in the job market. The level of confidence has returned to the normal range after dropping significantly in the downturn. Now,  54% of Americans think they would find a new job if they lost their current one. This is closer to the normal 58% and well above the low point of  46% in 2010, the lowest point since 1983. Employers added 2.2 million jobs in 2012, averaging about 180,000 a month. This confidence they could find a new job encourages more consumer spending and boost economic growth.

Housing will drive economy this year

Economists agree that the rebounding housing market will be a significant factor in the improving economy. Sales of new homes in March rose +1.5% to a seasonally adjusted rate of 417,000 units. This is an +18.5% increase over last year's 352,000 units. The sales pace considered healthy ins 700.000 units monthly. The median price of a new home was $247,000 up +3.0% from a year ago.

Sweet upwards movement for home sales

Rising prices, multiple offers, and bidding has come back to Tampa. Prices in Tampa Bay rose +20%
since last year. Single family homes sales increased +17.4% in March. Large institutional investors are buying up homes and creating rentals out of them. Most of these sales are cash and in March, 48.4% of all sales were cash. Condo sales grew slower but pricing moved up +15% to a median price of $92,000. The median single family home price is $144,049.

Pinellas County home sales on rise

Pinellas County, Florida March Home Sales

Courtesy of Pinellas Realtor Organization

 

 

 

Sales are up and inventory is down. Home prices are increasing with the average price at $145,000
vs. $132,000 a year ago. Things are definitely improving within the housing market.

Mortgage interest rates dip last week

The rate on an average 30 year fixed rate mortgage dropped last week to 3.41% down from the previous week of 3.43%.  The 15 year mortgage rate dropped to 2.64 from 2.65 a week before.

Those seeking unemployment benefits leveling out

Last week, about 4000 more people applied for unemployment benefits. This may suggest that sluggish March numbers may only be temporary. The 4 week average of those seeking benefits averaged 361,250 over the last 4 weeks.

Homebuilders break the 1 million mark

Home starts in March reached 1.04 million rising 7%. Apartment construction rose 31% reaching annual rate of 417,000 unit the fastest pace since January 2006.

Where are all the workers going?

America created only 88,000 jobs in March. This was disturbing at best. Even more disturbing was the report that 495,000 people disappeared from the work force...gave up looking for a job. This is the only reason the unemployment rate dropped to 7.6%. It actually increased if these folks were counted. Here is some more disturbing news. Questions have been asked as to why the Asian unemployment rate is only 5%, while it is  9% among Hispanics, and 13% for African Americans. Another shocking statistic is the fact that 9 million American workers in the age group 20-64 (almost 5%) are receiving disability, as compared to 1.5% of the work force in 1971. The workplace is supposed to much safer now that one would expect this number to be lower. The estimate for those unemployed, underemployed, or have stopped looking for employment is 14% of the workforce. The participation of eligible workers for employment has fallen to 63.3%, the lowest level going back to Jimmy Carter's administration.

Mortage interest fall sharply

Interest rates on a 30 year fixed rate mortgage fell to 3.43% down from 3.54% last week. This is approaching the low that was seen in November 2012 at 3.31%. That was the lowest rate going back to 1971.  The average rate on a 15 year mortgage was 2.65% down from 2.74%.

Florida 1st in Foreclosures

A Realty Trac study shoes Florida was #1 in foreclosure activity. During the first quarter of 2013, 85,671 homes in Florida got some kind of foreclosure filing. About 36,000 received first time foreclosure notices. Last year, the number was 73,344. This year's figure is a +17% jump. With Florida having 8.9 million housing units, this means that one out of every 100 homes saw some kind of foreclosure activity in the period. Among 209 metro areas studied, Miami, Orlando, and Ocala finished first through third, Las Vegas was  4th and Tampa Bay came in 5th place. In Tampa Bay, There were 13,491 homes who received some kind of foreclosure activity in the first quarter.

Guest Editorial addressing shadow inventory

A Brief Introduction to the Shadow Inventory

By Sarah Parr       ( contact:  sarah@floridaforeclosedlawyer.com)

A report by CoreLogic shows that the shadow inventory of homes in the United States, with 2.2 million housing units, decreased 28 percent in three years. The number of seriously delinquent homes, properties in foreclosure and homes held as REOs (real estate-owned) by mortgage servicers, but not yet listed on multiple listing services (MLS) were used by CoreLogic to determine the shadow inventory figure.

The shadow inventory

The U.S.’s shadow inventory comprises of a variety of homes not featured on the market. Half of the shadow inventory consists of vacant properties in some phase of foreclosure, also known as “zombie foreclosures.” Many homeowners vacate homes when they can no longer afford to pay their mortgage and anticipate foreclosure. Another part of the shadow inventory consists of the homes held by banks, but not up for sale yet, and homes that owners are holding off putting on the market.

The source

RealtyTRAC reports that the source of the large shadow inventory was caused by the finalization of the National Mortgage Settlement in April illustrated by a 59 percent jump in properties in some stage of foreclosure. The settlement invigorated pending foreclosure cases, as banks re-filed or were required to work with homeowners on alternatives to foreclosure, keeping their homes off the market. As Longwood foreclosure attorneys will tell you, shadow inventory mainly grew in judicial-process states since these states are prone to a buildup of foreclosure cases.

The consequences and the silver lining

Real estate market analysts feared that a simultaneous release of shadow inventory properties would greatly reduce prices. On the other hand, the shadow inventory properties have been slowly listed, and the smaller inventory has led to an increase in prices in some communities, Reuters reported. Single investors and investment firms have also tapered possible flooding of the market by purchasing large quantities of these homes when they are first listed, according to TIME.

The existence of shadow inventory creates uncertainty for homeowners looking to sell their homes and for predicting when a local housing market can expect full recovery. Shadow inventory can also cause housing data to underestimate the amount of inventory in the market. Nevertheless, there is a silver lining: consumers can expect a steady flow of inventory becoming available, especially in Florida, because of the large amount of shadow inventory. Presently, Florida has approximately 16 percent of the nation’s shadow inventory. Once a portion of these properties go through the long judicial-foreclosure process, Florida can count on a solid increase in housing inventory. Lawmakers are looking to remedy Florida’s long foreclosure process as well. The housing market will benefit greatly from a measured increase in supply for those eager to buy.

My Blog is always open for guest editorials like Sarah's which offer great information which benefits and educates us about the housing market.