Bellevue Real Estate, Mortgage, and Economy 3/28/11
Posted on 28 March 2011
Here is the Bellevue Real Estate Report for March 28, 2011:
QUOTE OF THE WEEK…”Home ownership makes sense for most Americans, particularly at today’s lower prices and bargain interest rates.”–Warren Buffett
INFO THAT HITS US WHERE WE LIVE…The famously successful Chairman of Berkshire Hathaway made his observation a month ago in his annual letter to shareholders. The Oracle of Omaha is certainly aware of the state of the housing market and added: “A housing recovery will probably begin within a year or so.” These encouraging words play nicely against last week’s news that Existing Home Sales dipped 9% in February, to just under 5 million annually. But this follows three months of substantial increases in existing home sales and experts still expect us to get back to the long-term trend of 5.5 million units annually, despite monthly fluctuations.
New Home Sales dropped 16% in February, to a 250,000 annual rate. Observers feel the new home market is being slowed by too many existing homes for sale, which are almost new and at lower prices. Consequently, these analysts feel it may take a few years for new home sales to fully recover, but they eventually see a substantial increase.
There’s more yak about another drop in housing prices, but the FHFA index of prices for homes financed by conforming mortgages is down just 3.9% from a year ago. Housing affordability is at its highest level in at least 40 years, so the housing market appears poised to improve.
BUSINESS TIP OF THE WEEK…Be different! Don’t copy competitors, stand out from them. It’s a crowded marketplace and many ads, web sites and offerings all look the same. Think of your customers’ needs and come up with a unique way to say how you meet them.
WELL, THEY PREDICTED VOLATILITY…As of Friday, stocks were up six out of seven days, so all three major market indexes were up for the week again. This followed two straight weeks of stock declines, but 2011 was forecast from the beginning to be a very volatile year on Wall Street. Investors seemed less worried about Japan’s nuclear problems, Middle Eastern unrest and European debt and put their money back into the riskier stock market. For the week, the Dow ended up 3.1%, at 12,221; the S&P 500 was up 2.7%, to 1,314; and the Nasdaq was up 3.7%, ending at 2,743.
Economic news continued mixed. Durable Goods orders were down in February, although up 6% from a year ago. We covered the housing situation above. But manufacturing keeps growing fast, with the Richmond Fed index up solidly in March, following a strong February gain. New weekly jobless claims fell to 382,000, putting them below 400,000 for five of the last seven weeks. Friday the latest Q4 GDP estimate was revised UP to a 3.1% annual rate from the prior 2.8% estimate. The government report showed corporate profits are now at an all-time record high. Hopefully the jobs will follow.
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