Jobs, Unemployment and the Spring/Summer Housing Forecast on the Ilyce Glink Show May 8, 2011
Why? More people came back into the jobs market. This week’s jobs report was another good news/bad news report. The good news is that jobs are being created. But some 471,000 people filed for initial unemployment benefits and that’s the worst number in 4 months. Until that number gets well below 300,000 per week (and we’ve barely been below 400,000), you know we’re not making the kind of progress we need to on jobs in this country.
This week, President Obama took on Big Oil by talking about how super-high gas prices are sucking the lifeblood out of the economy – and leaving consumers with little in their paychecks for spending.
True enough. I spent more than $75 to fill up my tank this week. Gas prices are at least $1 per gallon higher than they were a year ago, so you’re talking about folks spending an extra $20 to $30 per week on gas, or $120 per month. That’s a lot of gas cash each week. The stock market responded to President Obama’s comments by sending the price of a barrel of oil down 15 percent, but don’t expect it to stay there long-term.
Mark Teytel’s Spring/Summer Housing Forecast
Real estate agents and brokers typically love the Spring selling season. This is typically the most active season, with the biggest number of sales. (Yes, homes sell all year round, but Spring tends to be the season with the highest number of sales).
This year isn’t shaping up to be so good, according to Mark Teytel, of Realty1st (GetOutStartOver.com). Here’s how he put it: “While Spring brings hope for a traditional turnaround (after the slow fall and winter season) this will be the first home buying season spent without a home buyer tax credit since 2008.”
Even though I feel that home buyer tax credits generally weren’t worth the money we spent on them, they did help some people decide to buy over the past three years. Free money is free money.
Now, we don’t have a home buyer tax credit and all of the real estate numbers are down. Yes, pending home sales are up a little (existing homes sales, as per the National Association of Realtors) month-to-month, but they’re down from where they were last year. New home sales are down. Everyone feels pretty stuck, and we have a presidential election next year.
On today’s show, Mark asked this question: “Can real estate prices withstand the downward pressure of foreclosures and rebound for summer?”
Here’s how he lays out the case: According to Realty Trac’s numbers – Georgia has 70,662 foreclosures right now – a very high number:
- Four major counties in Metropolitan Atlanta Area have the largest amount of foreclosures and in most cases more than twice the number of foreclosures than the rest of the counties in the state.
- Fulton has 1,712 foreclosures (1 in every 260 housing units)
- Gwinnett has 1,524 foreclosures (1 in every 190 housing units)
- Dekalb has 1,195 foreclosures (1 in every 262 housing units)
- Cobb has 926 foreclosures (1 in every 303 housing units)
- According to Clear Capital (Nationwide) foreclosed property sales account for 34.5% of overall activity (that is up from 20% in the middle of 2010) – that’s a dreadful number, by the way, especially when you add all distressed sales (short sales) onto that number – it’s more than 50% of all home sales.
Mark says that the real estate market has not regained enough footing to withstand the strain of high proportion of REO sales. So, prices may continue to fall. Not such good news for sellers, but very good news for buyers, who will see exceptional prices with low interest rates under 5% for a 30-year fixed rate mortgage and under 4% for 15-year fixed rates.
It’s a good time to be a real estate buyer.
There are a bunch of things to keep in mind, but her best tip is the easiest: Even if you’re incredibly frustrated with how things are going, STAY CALM. As my mother puts it, you’ll catch more flies with honey than vinegar.
Ilyce Glink Show Notes
Follow-up information from calls we took on the air today:
If you’re interested in finding someone to manage your rental properties, you might want to ask Anne Lackey to recommend someone in your area. She and her husband, Mark, are long-time real estate investors, Realtors and property managers. They spoke about property management at one of my past How To Profit From Foreclosures events.