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Bellevue Real Estate, Mortgage, and Economy 5/24/11

Posted on 24 May 2011

Here is the Bellevue Real Estate Report for May 24, 2011:

QUOTE OF THE WEEK…”The greatest thing in this world is not so much where we are, but in what direction we are moving.”–Oliver Wendell Holmes

INFO THAT HITS US WHERE WE LIVE…People wonder if housing is moving in the right direction, especially after April Housing Starts fell 10.6% to an annual rate of 523,000 units. But a closer look reveals the decline was due mostly to multi-family units, which are volatile month to month and actually up 6.6% from a year ago. Also, the biggest drop was in the South, which had been hit with severe tornados. Outside that region, starts were UP 5.5%! Homes under construction are at their lowest level since 1970, so some areas may rebound from shortages in the next few months. Following a March rise, Existing Home Sales were down just 0.8% in April and the seasonally adjusted annual rate is still above 5 million. Total inventory edged up to 9.2 months.

There’s been a lot of talk about double dipping home prices, but this is simply not true for the majority of sales. Analytics firm CoreLogic reported that for March 2011, overall single-family home prices were off 7.5% versus the previous year. But when they took out distressed sales, typically made at significant discounts, the annual price decline in conventional home sales, which constitute the majority, was less than 1%! Furthermore, CoreLogic found that price declines for conventional home sales have slowed considerably in the last few months.

Review of Last Week:

SLIPPERY…The Dow and S&P 500 stock indexes both slid for the third week in a row, this time joined by the Nasdaq, which was flat last time around. Wall Street investors continue to worry over European government finances, with possible Greek debt restructuring and Spanish elections causing concern. On the home front, some folks fretted about a U.S. economic slowdown, as corporate earnings season, after a strong beginning, is ending with big players like HP, Home Depot and Wal-Mart failing to impress. But there still were corporate winners, including Dell, John Deere, Abercrombie & Fitch and Target and, for the quarter, many more companies have done well than have disappointed. For the week, the Dow ended down 0.7%, at 12,512; the S&P 500 was down 0.3%, to 1,333; and the Nasdaq was down 0.9%, at 2,803.  

It was also good to see that initial unemployment claims for the week came in better than anticipated, dropping to 409,000, with continuing claims falling as well. Economists are now talking about getting back to the 380,000 level shortly. Industrial Production was reported flat for last month, although still up for the year, and New York’s Empire Index and the Philadelphia Fed Index both showed the manufacturing sector growing in those regions, though at a slower pace.

Bellevue Real Estate Report