Bellevue Real Estate, Mortgage, and Economy 4/25/11
Posted on 25 April 2011
Here is the Bellevue Real Estate Report for April 25, 2011:
QUOTE OF THE WEEK…”I couldn’t wait for success, so I went ahead without it.”–Jonathan Winters
INFO THAT HITS US WHERE WE LIVE…The housing recovery isn’t yet a success, but last week gave us a few good reasons to keep plugging along. First came March Housing Starts, bursting UP 7.2% to a 549,000 unit annual rate. February starts were also revised UP 6.9%. Then we found out new Building Permits surged 11.2% in March to a 594,000 annual rate and were revised UP 3.3% for February. Starts and permits are still down over 13% from a year ago, as residential construction has dropped to only 2.3% of GDP, its lowest level on record. But economists say it won’t go much lower, and that’s what these latest numbers are signaling.
We also had Existing Home Sales UP 3.7% in March and off only 6.3% compared to a year ago. The median existing home price rose for the month and is down just over 5% for the year, while average prices are off just over 3% from 12 months ago. Looks like existing home prices are stabilizing. Finally, the supply of existing homes dropped to 8.4 months in February. Some experts see existing home sales getting back to an annual level around 5.5 million units, but caution that the recovery will be volatile.
STOCKS REVERSE RECENT SLIDE…In a four-day week of trading, investors sent stock prices back in the right direction (UP!), as all three major indexes posted gains. This happened in spite of some negative items that could have easily pulled things the opposite way. The biggest bit of bad news came Monday when Standard & Poor’s lowered its outlook to negative on the U.S. AAA credit rating. They threatened to downgrade this rating unless Washington can cut its huge federal budget deficit in the next two years. We also had the Philly Fed index showing manufacturing sentiment in that region dropping to a five-month low. For the week, the Dow ended UP 1.3%, at 12,506; the S&P 500 was also UP 1.3%, to 1,337; and the Nasdaq was UP 2.0%, ending at 2,820.
But a bunch of blow-out corporate earnings reports got everyone feeling more hopeful and started the stock market rallies. Big winners who exceeded Q1 earnings expectations included Intel, United Technologies, Yahoo! and Freeport-McMoRan. Then Capital One, Qualcomm and UnitedHealth joined the party, but the big star was Apple, with a 95% boost in earnings during its last quarter, mostly from iPhone and Mac sales, since the new iPad 2 has been slowed by a production backlog. The week ended with March Leading Economic Indicators UP better than expected.
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