Bellevue Real Estate, Mortgage, and Economy 8/16/10
Posted on 16 August 2010
INFO THAT HITS US WHERE WE LIVE. Last Wednesday the National Association of Realtors reported the median price of existing single-family homes UP for Q2 in two thirds of U.S. metropolitan areas, or100 markets. This compares with only 26 markets with price gains in the same quarter a year ago. Experts say these figures show the federal tax credits helped stabilize home prices in the first half of the year. Nationally, the median price for single-family homes increased to $176,900 in Q2, UP 1.5% from a year ago.
The NAR also reported sales of existing single-family homes and condos for Q2 were UP 9.1% over Q1, hitting an annual rate of 5.61 million. That number is UP 17.3% from Q2 a year ago. With the tax credit gone, the NAR is forecasting a Q3 sales drop to a 4.55 million annual rate. But they do see sales coming back in the last three months of the year, to a 5.27 million unit annual rate. The NAR’s chief economist added: “Prices in some areas remain below replacement construction costs, so even with an elevated supply of existing homes…we don’t expect any consequential movement in home prices for the foreseeable future.”
Freddie Mac’s weekly survey showed mortgage rates staying at record low levels for conforming loans. But demand for purchase loans has dropped after the tax credit expiration, according to the Mortgage Bankers Association.
DIPPY… It was a week of “double-dip recession” fears, but when all was said and done, the economic recovery continued, albeit at a slower pace. The only dipping that occurred happened on Wall Street, as investors’ worries sent the Dow Industrials down 265 points on Wednesday. By the time the markets closed Friday, all three major indexes had truly dipped — from 3% to 5% for the week. For the week, the Dow ended down 3.3%, to 10303.15; the S&P 500 was down 3.8%, to 1079.25; and the Nasdaq was off 5.0%, to 2173.48.
That Wednesday dip in the Dow was the delayed reaction to the results of the Fed meeting on Tuesday. The central bank kept the rate down at 0%–0.25%, but their policy statement raised investors’ “double-dip” worries. The Fed said the economy isn’t as strong as they thought it would be two months ago and they would begin buying Treasury bonds “to support the economic recovery.” But in spite of Wall Street’s jitters, the real economic data wasn’t so bad.
Preliminary Q2 Productivity slipped a tad, but it’s UP 3.9% over last year. The trade deficit in June grew more than expected, but exports dropped only slightly and are UP 17.7% for the year, a healthy sign for American companies. July Retail Sales were up less than expected, but when May and June upward revisions were included, the numbers beat expectations, UP 0.7% overall and UP 0.2% excluding autos. And those talking up a global double-dip recession were quieted when Germany’s Q2 GDP showed a 2.2% expansion from the previous quarter, that country’s fastest growth in two decades.
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