I don’t know about you, but as I go throughout my normal day, scan the paper, hear a sound bite or two on the radio, catch a pundit in my peripheral vision on a TV at lunch – my subconscious mind seems to only pick up on the BAD news. By the end of the day, I want to crawl in a hole, assume the fetal position and pray that I can stay there until everything blows over. Sure there’s plenty of discouraging words out there, but as I discipline myself to focus on ALL the news, I find that there are plenty of things that are pretty encouraging. Writing this monthly 8-Ball blog has been good for me because it makes me seek out, discover, and focus on the GOOD NEWS – and gives me the platform to help all of us realize that it’s not the end of the world, and much better days are now upon us.
January was no exception – despite all the bad news I thought I heard, there are some great things to report and some very smart and educated people saying some very encouraging things! See what you think . . .
#8 – BUILDING PERMITS
Building permits in the U.S. unexpectedly jumped in December, signaling gains in housing will be sustained into 2010 after winter weather depressed construction at the end of last year.
Applications rose 11 percent to a 653,000 annual rate last month, the most since October 2008, the Commerce Department said today in Washington.
Bob Willis for Bloomberg – reported in BusinessWeek, January 20, 2010
#7 – NATIONAL RECOVERY
The deepest, meanest recession since the Great Depression has ended . . . according to a new report from The University of Georgia’s Selig Center for Economic Growth at the Terry College of Business.
“. . . my forecast and the bottom line is that the recovery will be sustained,” said Jeff Humphreys, director of the Selig Center.
In 2010, the number of single-family home starts is expected to increase by nearly 50 percent, as construction cases to a “headwind to recovery,” according to Humphreys.
Atlanta Business Chronicle, December 21, 2009
#6 – REMODELING
Homeowner improvement spending is likely to reach a cyclical bottom in the current quarter and steadily increase through 2010 according to the Leading Indicator of Remodeling Activity (LIRA), released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
Remodeling industry fundamentals are generally beginning to turn positive. “Sales of existing homes are on the rise and home price declines are moderating in most markets across the country,” says Kermit Baker, director.
“As inventories continue to decline and balance is gradually restored between buyers and sellers, we should reach self-sustaining housing conditions and firming home prices in most areas around the middle of 2010. That would mean broad wealth stabilization for the vast number of middle-class families,” said Lawrence Yun, NAR chief economist.
Residential Design & Build Magazine, January 22, 2010
#5 – MORTGAGE RATES
The average 15-year mortgage fell to 4.62 percent while the larger jumbo 30-year fixed rate retreated to 5.97 percent. Adjustable rate mortgages were lower as well, with the average 3-year ARM sinking to 4.71 percent and the 5-year ARM dropping to 4.68 percent.
Residential Design & Build Magazine, January 15, 2010
#4 – CONSUMER CONFIDENCE
American consumer confidence improved sharply this month, returning to levels not seen since the financial crisis began in September 2008, according to the most recent results of the RBC CASH (Consumer Attitudes and Spending by Household) Index.
“This month’s RBC Index has risen to levels not seen since the financial crisis hit with full force,” said RBC Capital Markets U.D. economist Tom Porcelli. “The latest increase seems to be based on the recent string of positive economic news. This bodes well for continued improvement in consumer confidence, which will be crucial to economic recovery.”
Qualified Remodeler, January 14, 2010
#3 – HOME PRICES
Americans are feeling better about the economy, home prices are on the rise and companies are forecasting a brighter 2010. While no one doubts the economy has a long way to go to come back from the punishing recession, the reports Tuesday were signs of progress for a recovery that has proceeded in fits and starts.
“We’re definitely moving in the right direction,” said Scott Hoyt, senior director of consumer economics at Moody’s Economy.com.
Home prices rose slightly . . . with fourteen of the 20 cities in the Standard & Poor’s survey notching gains from October to November. Rising prices are important to the economic recovery because they make homeowners feel wealthier and lead them to spend more money.
Ashley M. Heher, Associated Press Writer, Marietta Daily Journal, January 27, 2010
#2 – LEADING INDICATORS
Many U.S. leading indicators continued to improve this month. The ECRI Leading Index, which is a gauge of future economic growth, increased to its highest level in 77 weeks, and this month posted a growth rate of 24% year-over-year – the second largest annual increase since ECRI began tracking the statistic in 1968. Stocks once again improved in December, yet the recent rapid rate of increase has begun to slow. All four major indices we track have posted year-over-year results ranging from +19% to +44%. The S&P Homebuilding Index also improved in December.
John Burns, John Burns Real Estate Consulting/U.S. Building Market Intelligence, January 20, 2010
#1 – FRESH FROM THE INTERNATIONAL BUILDERS SHOW
Here’s some good economic news directly from the mouth of David Crowe, chief economist at the National Association of Home Builders. During one presentation he mentioned the following reasons to feel good about the housing market and the economy in general:
- The recession ended in Q3 of 2009
- Job losses are tapering off
- Q3 of 2009 showed positive employment
- Interest rates are remaining low
- Housing starts bottomed out in 2009
- Home prices are stabilizing
- The ratio of home price to household income is back to a sustainable level
- 50% of foreclosures are in only six states (problem is largely localized)
- 70% of foreclosures are in only 11 states
- Supply of unsold homes is down to roughly seven months from a peak of roughly 12 months
Residential Design & Build Magazine, January 22, 2010
BTW – have you seen Washington, DC the past few days? Where is Al Gore’s rebuttal of actual climatic conditions – I’m sure he could spin global warming as the culprit behind the largest snowfall in DC – EVER?! Maybe God in His demonstration of the power of nature will keep Congress snowed in long enough for the economy to recover before they can pull any more boneheaded moves. Sorry, I digress. You got an opinion – let us all know . . .
Dale Peek President
November started out a little slow so far as encouraging news about the home building industry was concerned, but by the end of the month I had way more items than I could fit in this issue. So, the encouragement continues, and things are still looking up, and “The Great Recovery” is upon us – take a look and see what I mean . . .
#8 – PENDING HOME SALES
Pending home sales rose again, marking eight consecutive monthly gains – the longest streak since measurement began in 2001, according to the National Association of Realtors.
In the South, pending homes sales increased 4.9 percent to an index of 109.7 and is 22.8 percent above September 2008.
Qualified Remodeler Magazine, November 2, 2009
#7 – UNEMPLOYMENT
In a hopeful sign for the economy, the number of newly laid-off workers filing claims for unemployment benefits fell below 500,000 last week (466,000) for the first time since January. That was the fewest since September of last year. And it was far better than the number economists had expected.
Weekly claims peaked at 674,000 in March and have since been trending lower.
Jeannine Aversa and Martin Crutsinger, Associated Press Writers, November 26, 2009
#6 – FORECLOSURES
The latest housing data suggests things may finally be turning around (on foreclosures). The inventory of new homes in metro Atlanta has shrunk to about 11,000, down 37 percent from a year earlier, according to real estate research firm Metrostudy.
“It’s just getting better and better,” said Eugene James, director of Metrostudy’s Atlanta division. “There’s no secret here. We’re selling houses.”
Paul Donsky, The Atlanta Journal-Constitution, November 12, 2009
#5 – EXISTING HOME SALES
Buyers clearly felt the clock ticking in October, snapping up existing homes at a seasonally adjusted annual rate of 6.10 million units, according to data released Monday by the National Association of Realtors (NAR).
It represented a 10.1% gain compared to the previous month and a 23.5% year-over-year increase in such activity.
Alison Rice, Builder Online, November 23, 2009
#4 – FIRST-TIME BUYERS
First-time home buyers reached the highest market share on record during the past year according ot the latest consumer survey of home buyers and sellers released at the 2009 REALTORS Conference & Expo.
“Tax incentives, record high affordability conditions and a pent-up demand brought a record share of first-time home buyers into the market,” said Paul Bishop, NAR Vice President of Research. “These buyers are critical to housing and a general economic recovery because the market always heals from the bottom up – they absorb inventory, free existing owners to make a trade and stimulate related goods and services.”
The number of first-time home buyers rose to 47 percent of all home sales from 41 percent of transactions in last year’s study, and was the highest on record dating back to 1981.
Qualified Remodeler Magazine, November 24, 2009
#3 – AFFORDABILITY
Nationwide housing affordability, bolstered by affordable interest rates and low house prices, hovered for the third consecutive quarter near its highest level since the series was first compiled 18 years ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) released today.
Residential Design & Build Magazine, November 20, 2009
#2 – HOME SALES
Home sales will increase 15 percent to about 5.7 million units and Realtor income will be up 20 percent in 2010, NASR Chief Economist Lawrence Yun told a packed room of Realtors today in a residential economic update at the 2009 NAR Conference & Expo.
Yun credited the home buyer tax credit with unleashing sales on the lower-end of the housing market this year, bringing up to 400,000 first-time home buyers into the market who wouldn’t have bought otherwise. That influx tightened inventories of starter homes, shored up prices, and helped reduce households’ fear over continuing price drops.
Residential Design & Build Magazine, November 18, 2009
#1 – LEADING INDICATORS
Two of the most prominent leading economic indicator indices are absolutely booming, indicating that strong growth may occur in 2010. The primary reasons for the booms are 1) the rising stock market, 2) a drop in initial claims for unemployment, and 3) higher commodities prices.
Also, employment losses are bottoming out, and even previous months look better because of positive revisions. The pace of job losses is moderating in nearly all sectors of the economy, particularly in Manufacturing, which has seen the greatest decline. Finally, initial jobless claims and mass layoffs have slowed and are below peaks reached earlier this year.
The Leading Economic Index 6-month growth rate increased to 11.6% in September, recording the largest growth rate since 1983. The ECRI Leading Index, which is a gauge of future economic growth, has risen 26% since one year ago, representing the largest growth rate since ECRI began tracking the statistic in 1968. Stocks were essentially flat compared to last month. Based on October data, all four indices we track have posted positive year-over-year gains – the first time since December 2007 – and have risen 4-19% compared to one year ago. The S&P Homebuilding Index declined in October, falling nearly 9% from the prior month, yet has increased over 3% since one year ago. CEO’s are now much more confident about the economy, according to the CEO Confidence Index. CEO’s are now as confident about the economy as they were two years ago, and based on a recent survey 83% expect their profits to either remain flat or increase in the next 12 months and 84% of CEO’s plan to keep the same number of employees or increase the number of employees over the next year.
John Burns, John Burns Real Estate Consulting, November 20, 2009
I sure hope you are realizing some tangible results from all this great news. We’re just small fish in a really big ocean, but I have to say that we are busier right now that we have been in a long while. That’s just an indication of what is happening in our little part of the world, and certainly not quite up to where we were a couple of years ago, but it makes me hopeful that the glow I see at the end of the tunnel is daylight, and not a train!
Surely I’m not the only one that’s seen some encouraging activities. This blog is a great place to post your thoughts and experiences for us all to see. You never know how or who you might influence with your words of wisdom or stories of success. Hundreds who will read your words, so come on, make an impact!
Dale Peek President
Thank you for finding all this great information and keeping us informed.
Joe
You may have gotten your wish Dale….looks like Congress is snowed in this week and they’re all off next week for President’s day. How far do you think we can get with 2 weeks?
Thanks for keeping us focused.
Rick