Bellevue Real Estate, Mortgage, and Economy 6/27/11
Posted on 27 June 2011
Here is the Bellevue Real Estate Report for June 27th, 2011:
INFO THAT HITS US WHERE WE LIVE…It certainly takes plenty of determination to find the opportunities in today’s housing market. Last week the National Association of Realtors (NAR) reported Existing Home Sales down 3.8% in May to an annual rate of 4.81 million units, a six-month low. The median price was up for the month, though down 4.6% from a year ago. Inventories declined, but the months’ supply increased to 9.3 because of the slower sales rate. Nevertheless, the NAR’s economist opined, “…sales activity in the second half of the year is expected to be stronger than the first half, and will be much stronger than the second half of last year.”
Thursday’s New Home Sales showed a 2.1% drop for May, to a 319,000 annual rate, but this did beat expectations. The months’ supply fell to 6.2, as inventories dropped to their lowest level on record. Yet the FHFA home price index, which measures prices for homes bought with conforming mortgages, was up 0.8% for March, its largest monthly gain since 2005! The Mortgage Bankers Association (MBA) reported purchase loan demand down a seasonally adjusted 3.9% from the week before, but up 4.4% over a year ago.
ONE UP, TWO DOWN…It was a volatile week in stocks, with only the Nasdaq index up, while both the Dow and the S&P 500 were off. The up-and-down stock prices mimicked Wall Street’s responses to the economic situation. The week started on an up note, as Greek debt problems (which could impact U.S. banks) seemed closer to solution. But on this side of the pond, investors found little solace in Fed Chairman Bernanke’s admission that the economic recovery is slower than expected. He thinks food and energy prices will subside, but doesn’t have a clear take on why the slow pace of recovery persists. He also said that the majority of home sales “have much more stable prices than houses sold on a distressed basis,” as reported here on June 6.
The next day, the International Energy Agency (IEA) announced it will release 60 million barrels of oil from strategic reserves, with half coming from the U.S., to make up for Libya’s shortfall. This should eventually bring down gas prices and calm inflation fears, both good for the economy. Q1 GDP was revised up to 1.9%, still well below Q4’s 3.1% growth rate. And on the jobs front, key to the housing market, new weekly unemployment claims edged up to 429,000. But corporate profits were up 12.1% annually and May Durable Goods Orders showed encouraging growth.
For the week, the Dow ended down 0.6%, at 11,935; the S&P 500 was down 0.2%, to 1,268; but the Nasdaq was UP 1.4% to 2,653.
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