Real estate housing and economic news round up for February 14 2017…
Here is my special Valentine’s gift for you:
Once upon a time, there was no internet. Real estate brokers had exclusive access to real estate listing data. There was hardly any transparency, scale, or speed in viewing listings, checking comps, and making offers. Everything was offline—and very controlled. Things are completely different now.
Valid points and much like almost every job, technology is threatening to make some jobs obsolete.
However consider this chart showing the percentage of buyers that are using a real estate agent:
Too many “Goldman guys” already have high-up positions in the Trump administration, the person said, and that could knock Donovan down to one of the undersecretary positions — possibly undersecretary of the Treasury for domestic finance. The presence of several former Goldman officials at the highest reaches of the administration runs counter to the president’s regular attacks on Wall Street firms during the campaign. The Goldman hires have also given Democrats fodder for attacks on Trump for stocking his government with officials from the investment bank.
I still do not understand why someone that talked about draining the swamp would have so many “Goldman guys” on his team. To me, the influence of Wall Street, the big banks and corporations are part of the problem with the swamp.
The lawns of homes purchased this year in vast swaths of coastal America could regularly be underwater before the mortgage has even been paid off, with new research showing high tide flooding could become nearly incessant in places within 30 years.
Such floods could occur several times a week on average by 2045 along the mid-Atlantic coastline, where seas have been rising faster than nearly anywhere else, and where lands are sagging under the weight of geological changes.
Anyone that does not believe in climate change should buy as much land on the coast as they possibly can…
In the age of Trump, America’s biggest foreign creditors are suddenly having second thoughts about financing the U.S. government.
In Japan, the largest holder of Treasuries, investors culled their stakes in December by the most in almost four years, the Ministry of Finance’s most recent figures show. What’s striking is the selling has persisted at a time when going abroad has rarely been so attractive. And it’s not just the Japanese. Across the world, foreigners are pulling back from U.S. debt like never before.
Despite all the attention that the Fed gets regarding interest rates, what is going on with Treasuries can also affect mortgage rates.
U.S. Treasury bills, bonds and notes directly affect the interest rates on fixed-rate mortgages. U.S. Treasury bills, bonds and notes directly affect the interest rates on fixed-rate mortgages. When Treasury yields rise, banks charge higher interest rates for mortgages.
So if investors get spooked by Trump, they may cause turmoil in the Treasuries market that could cause mortgage rates to rise.
From NY Fed:
Housing is by far the most important asset for most households, and, not coincidentally, housing debt dwarfs other household liabilities. The relationship between housing debt and housing values figures significantly in financial and macroeconomic stability, as events during the housing bust of 2006-12 clearly demonstrated.
Overall, our scenario analyses indicate that the household sector remains vulnerable to severe house price declines, although the high level of creditworthiness among today’s borrowers would serve to mitigate that effect.
Even if you have great credit and/or income, you must be careful when buying a home. As my very wise Grandmother used to say:
You are never more than a day away from the poor house.
Buying a house is one of most serious decisions you will ever make. Getting it right can set you up to build wealth and secure your future. Getting it wrong can completely screw you up.
Also from the NY Fed:
- Real consumer spending increased at a faster rate in December than in November, with overall growth in Q4 showing a solid pace.
- Consumer spending growth in Q3 and Q4 was accompanied by a declining personal saving rate.
- December data suggested some continued near-term momentum for business equipment spending, but investment in nonresidential structures declined in Q4.
- Manufacturing activity picked up in December.
- Housing sector data for Q4 was reasonably strong
- Real residential investment increased in Q4 after two consecutive quarterly declines
- Payroll growth remained solid in January.
- The unemployment rate, labor force participation rate, and employment-population ratio all rose in the month
- Overall, the data indicate wage growth remains modest
- Headline and core inflation continued to run below the FOMC’s longer-term objective
- Headline inflation has firmed over the past several months, while core inflation has been fairly stable
- U.S. equity indexes and nominal long-term Treasury yields were little changed on net.
- Oil prices and longer-term inflation compensation were also relatively stable.
Check out a few of the charts:
I will leave it to you to draw your own conclusions with these charts. While things are much better than they were a few years ago, we still have a long way to go.
We find post-job-loss earnings recovery is faster for young adults who live near their parents than for young adults who live farther away. This positive effect diminishes gradually as the distance to one’s parents increases. Most of the effect is driven by higher wages after job displacement, not by differences in the number of hours worked. The effect is not present for older workers, who may be caring for elderly parents.
Interesting study. While this does not apply for everyone, there is no doubt that having family close by does help in times of trouble.
Long long ago, I moved away from my home town and ended up on my own. I had no one to call if I was sick or my car broke down.
Just me and Stinky…
But if I had never moved away, I would probably still be in my home town at a dead end job, wasting my life.
Sometimes, the best high wire acts don’t have a safety net. You just have to decide what is best for you.