Bellevue Real Estate, Mortgage, and Economy for 8/29/11
Posted on 29 August 2011
Here is the Bellevue Real Estate Report for August 29, 2011:
INFO THAT HITS US WHERE WE LIVE…Last week’s “difficulty” for the housing market came from the news that New Home Sales dropped 0.7% for July, to a 298,000 annual rate. They’ve been in this low range since May of last year, competing with existing homes selling at discounts. But there is opportunity. The inventory of new homes dropped to its lowest level on record. Equally encouraging, the new home median price is up 4.7% over a year ago and the average price is up 8.0%.
Some analysts feel home sales this fall will be better than last, as supply remains manageable and existing homes for sale are 20% below peak levels. We already see the FHFA index, measuring prices for homes financed by conforming mortgages, UP 0.9% for June, its third monthly rise in a row and the biggest monthly gain since 2005. But the index is still 4.3% under where it was a year ago.
RALLY CAPS BACK ON…Investors, focused on some positive economic indicators, sent stock prices up for the week for the first time in over a month. There was some negative regional manufacturing data, but these surveys sometimes reflect sentiment more than business activity. Chain-store sales also slowed a little, typical for August, but they’re still comfortably above last year’s levels. Friday, real GDP growth was revised down to 1.0% for Q2, but business investment was revised up and inventories down, both good signs for better growth the last six months of the year. For the week, the Dow ended UP 4.3%, to 11285; the S&P 500 was UP 4.7%, to 1177; and the Nasdaq was UP 5.9%, to 2480.
Indisputably positive news came with July Durable Goods orders UP 4%, a level of business investment that makes it hard to argue for a double dip recession. Shipments of core capital goods (no aircraft or defense items) are UP 9.5% for the year. Friday the focus was on Fed Chairman Ben Bernanke’s speech in Jackson Hole, Wyoming. He repeated his view that the recovery is slower than he had hoped for and he’s prepared to use whatever tools are needed, but there would be no changes to monetary policy right now.
Bellevue Real Estate Report
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