Tuesday, December 15, 2009

That dreaded "I" word...

Yes, INFLATION. Anyone alive in the Jimmy Carter era just visibly shuddered (I know I did)... What about inflation? Well, the Fed has kept rates incredibly (artificially?) low in order to spur on the "recovery" (again in quotes due to the low rate of job creation) and certain sectors have experienced rising costs. The Producer Price Index (PPI) is up, which would typically bring us a rate increase--ditto for consumer goods and energy pricing. SO if Inflation is coming (or is already here as some say) we would typically see the Fed raising rates after this week's meeting. What's that mean to you and me? Well, things seem to be improving relatively quickly, except for jobs, though there was a small drop in November's unemployment numbers. While energy prices are up the price of oil and gasoline has dropped recently. In essence there are a lot of positive things happening (even increased consumer spending was reported!) but there is still a 'wait and see' feel to our nation. I don't think anyone will feel comfortable while jobs are still getting slashed (which will continue into 2010 per many Economists) and until this health care fiasco is sorted out (put it this way--if you were a small business owner, would you be hiring right now with the uncertainty of being in business with the possible changes on the horizon?). Likewise, we have a long way to go despite all the 'dog and pony' shows going on about banks. There are few modifications taking place and the ones that are proceeding aren't helping to stop the flow of foreclosures. And to add to the misery, we STILL have at least a year of adjustable rate mortgages 're-setting' (possibly two) due to the large numbers of 5/1 ARM refinances that happened... well, just over 5 years ago. So what of inflation? If things keep improving and (as noted in several postings) if we continue 'printing money' the Fed will HAVE to raise rates. Will the struggling economy be able to take that shot? As always, time will tell :) Good luck, God Bless, Be safe... Bo

Monday, December 7, 2009

Why the IRS should go away!

I have always noted that I am a fan of the "Fair Tax" as it levels the playing field for ALL Americans--Bill gates would pay the same tax rate on a Ferrari as I would pay for a gallon of milk, not to mention people who hide their income and don't pay their 'fair share' (to coin a Liberal catch-phrase). Spare me the details about the working poor being penalized as you probably haven't read the bill (someone correct me, was it HB 5 or 25 or something??) and don't understand the REBATE they would receive... But I digress. If you are a FAN of the IRS (or even if you aren't), please read this article of the IRS and how they managed to pour salt in the wounds (acid?) of a hard-working American. God Bless this family and I pray that their ordeal is over. Are YOU next?

Monday, November 23, 2009

Quote of the Week!

While I am not fully 'educated' on whether or not I like or dislike Treasury Secretary Tim Geithner (I definitely hate the fact that big O couldn't find someone who didn't owe back taxes for the post, however) I must admit that I LOVED the following interchange reported by the Wall Street Journal last Friday (from the Joint Economic Committee):

REP. KEVIN BRADY (R-TX) "The public has lost all confidence in your ability to do the job."

TREAS. SEC. GEITHNER: "What I can't take responsibility is for the legacy of crises you've bequeathed this country."


I concur Mr. Geithner, you hit the nail on the head (and nailed Mr. Brady in the process). I guess I'll go harsh this morning: I condemn Congress. I blame Congress. I am unhappy with Congress. For too long we have had these people running our country into the ground. BOTH parties. It's time for this mess to stop. It's time for TERM LIMITS. Elect representatives based on what messages they 'sell' us during elections (e.g. do we agree with their point of view? Then send them to DC for a short time to accomplish that goal and can them if they don't do what they promised). House of Representatives? 3 terms (that's six years). Senate? 2 terms (twelve years). I am unsure how I'd feel about a Representative 'graduating up' to the Senate (giving them a potential 18 year 'reign' on our nickel). I just can't see any other options to get these people to do what we want them to do--so that our "government of the people, by the people, for the people shall not perish from the earth."

We are at a true crossroads in our country. I have made my own choices in my life and I have benefited or been 'punished' for them. It is not the role of the government to step in and save me (or further punish me) for my choices. You cannot legislate change; there is no moral obligation (or requirement) for the government to take money from me and give it to someone else. I have my own issues and 'causes' to handle--it's not my job to be someone else's guardian--except for my wife, kids, dogs and family. My choices. Again, read John Galt's speech from Atlas Shrugged and you'll understand (for a highly condensed version, click here).

Lest you think I am a complete selfish monster, I do want to point out that I am a charitable person--however, I give to what I support-not what the government 'thinks' I should support. My 2 cents as always... Happy Monday, eh? : )

(For one important group I support, check out The Rotary Foundation and consider supporting them...)

Thursday, November 19, 2009

Current Outlook

The Recession Is Over!

Oh, really? Ask one of the thousands of unemployed people and I'd bet you'll hear a different answer. Yes, home sales (and prices) have risen a bit and yes, retail sales have risen a bit, BUT we need jobs. (I could digress about wasting time with health care reform vs. our real problems (It's the Economy, Stupid!) but this is not to be a politicized rant today).

This week's unemployment figures didn't truly rise (on a nationalized level, but in GA it actually went UP) but the numbers are higher than a level that indicates the economy is adding jobs. New unemployment claims have fallen around 22% since the Spring, but who is hiring? With people losing jobs and with those people not FINDING jobs, foreclosures could be the next flood to hit. We have been hit with all the adjustable-rate and/or subprime loan foreclosures in prior years but we are seeing many more fixed rate 'plain vanilla' loans going to the courthouse steps of late. To turn the tide, we need to see weekly claims to fall to higher than 400,000 for several weeks! Unemployment benefits were extended, but this lifeline will run out in January unless we see another extension from Congress. Some members of "The Fed" have noted that our recovery will resemble an "L" with a gradual upward tilt from the base (which is better than the L pointing down!). Small businesses typically contribute about a third of net job growth in the last 2 economic recoveries--not this time! Small businesses have accounted for about 45% of net job losses through the end of 2008, so it looks like we are in for a long fight...

On a positive note, the federal tax credit for 1st-time home buyers was extended and 'move up' buyers were given their own credit of $6,500 as well. HOWEVER, I am very disappointed in that credit as it is restricted to people who have lived in their home for 5 of the last 8 years. Let's cut to the chase-I am 44 and I am finally 'stable' (well, at least as it relates to moving!) and I don't plan to move any time soon. I have never lived in a home for over 5 years so if I was looking to move (I'm not) I couldn't get the tax credit. I think a more reasonable figure would have been a 3-year restriction but no one called for my opinion...

If we could loosen credit to credit-worthy borrowers AND get back to common sense underwriting we could get out of this mess faster. As I keep saying, this all started with Housing and Housing will get us out of this mess. We need to repeal the Home Valuation Code of Conduct as well so we can go back to using quality appraisals vs. whomever happens to be cheapest, but again, that's a topic for another day.

Finally, I read that Atlanta's housing inventory began to deplete in the 3rd quarter and housing starts actually ROSE. The quote (from Metrostudy) that really rang true for me was this: "We do not have an oversupply problem, we have a demand problem". This is what I am referencing above-if people could sell their homes they could move into a new home. It's like a 'reverse' domino effect-nothing is falling into place so that the next domino can fall. No credit = no home sale. No home sale = no seller becoming buyer. Hopefully we'll see some positive movement sooner rather than later!

Wednesday, November 18, 2009

Senator Byrd-time to go?

This is a perfect case for Term Limits. While I respect the fact that Senator Byrd has set a record for his service I want to 'cut and paste' a few things from the AP article written by Laurie Kellerman.

*It was unclear whether Byrd would be able to attend Wednesday's session.

* He has cast more than 18,000 votes and, despite fragile health that has kept him from the Senate floor during much of this year, has a nearly 98 percent attendance record over the course of his career.

*Friday is his 92nd birthday.

Now I must admit that I have bias against him as he is known for his pork (another quote from Laurie's article: "He's a champion of "earmarks" - pet project spending that critics also call "pork." He's helped bring home to West Virginia $326 million for 2008 alone, according to Citizens Against Government Waste.") but truly I feel that ALL of our Senators and House members should have a much shorter shelf life. If he is not attending Congress, why is he there? And it's not blaming him for anything in particular, but I feel that many in Congress are too focused on special interest groups and companies and are biased against making tough decisions for our country versus voting using polls so that they can remain in Congress! As I type that comment, I must note that I think my Representative, Dr. Tom Price, has done great things and his voting has been in-line with many of my thoughts. So what to do? Guess it will be a 'toss the baby out with the bathwater' (e.g. getting rid of a 'good guy' along with some of the corrupted (yes, I said it) members).

Why are term limits so important to me? ALL of Congress have forgotten why they are in office: to serve US. Not special interests and not to vote laws that more or less purchase votes. As it relates to health care, why do they get a VIP health plan (at our expense)? Why can't they use the new health plan (in whatever form it passes)? As far as unemployment is concerned, wouldn't you like to vote on your own pay? Even as monster corporations get bashed by Congress, you don't see CEO's paying themselves MORE money when the company is losing money? I digress by complaining about Congress complaining about "corporate excess" by flying around in corporate jets--how does Madame Queen Pelosi get around? Do you think you'll ever sit next to her in Coach (heck, even on 1st class!) on Delta??? NOT!

Bottom line: Congress is broken. Let's end the fiefdoms of ALL of our "leaders" (lowercase and in quotes on purpose) and see how they fare in the real world like US. See how their tax and spend policies help them out (there are over 237 Congressional MILLIONAIRES currently serving us! Wonder how they'll like the tax code if they were private citizens again?) Let's work on getting Term Limits passed! My 2 cents and your rant for the day :)

Friday, November 6, 2009

Obama signs tax credit extension!

In a rare bit of bi-partisanship, the house passed a bill extending jobless benefits AND the 1st-time homebuyer tax credit in a 403-12 vote (wonder who the 12 were??). The bill also expanded this tax credit, giving a $6,500.00 tax credit to 'move up' buyers. While this is great news, there is one "issue" (if you can call it that) about this new credit--you have to have lived in your principal residence for over 5 years. Using myself as an example, I have only been in my current home for 3 years. Prior to that, I lived in my old house for right at or just under 5 years, so that may have worked, but I was only in my first 2 homes for 2 years/4 years respectively. I would say that this is more or less common (to be so 'transient'). People like to move up; that's the goal! My current home is exactly what I need for now and I don't forsee moving in the near future. But if I wanted to move, this new law would not benefit me at all. I would think that this restriction is going to make this new tax credit pretty worthless. The intention was good, but the execution leaves a lot to be desired. But hey, I won't complain any longer as any help for the housing industry these days is a good thing (and the tax credit extension is a great thing too!).

One soapbox issue: based on how well the government has performed with the H1N1 vaccine, do you really want them handling our healthcare? While I'm at it, can you think of ANYTHING the government does efficiently? Just a thought...

Wednesday, October 28, 2009

What a difference a day makes

Well, new home sales are down by 3.6% to a seasonally adjusted annual rate of 402,000 as reported by the Associated Press today. Why is that a bummer? Economists expected growth to the tune of 440,000. Whoops! Guess all is not well with our economy is it? Oh well, don't worry about that, let's focus all our efforts on healthcare while the country flounders. But hey, oil prices dropped because our economy sucks and due to a strengthening dollar (stong dollar usually equates to weaker oil prices as oil can be used as a hedge against a falling dollar). The world seems to see the global economy strengthening, I hope they are correct (and that sales rise in the last quarter of the year!). Fingers crossed!

Tuesday, October 27, 2009

Welcome back to 2003!

Good news-home prices are up again per Case-Shiller index.

Bad news-home prices are still down relative to prior years.

What does "prior years" mean? Try the Fall of 2003! That is the rough equivalent of where we are today, 10/27/2009. Nice, huh? While you chew on that stat, metro ATL lost 27,800 construction jobs in September. What do you think will happen when the tax credit goes away in December? I read a quote from one economist that sales are predicted to drop 5% and eventually bottom out in 2010.

SO... do you have time to contact your leaders in Congress NOW?

Friday, October 23, 2009

Home-buyer Tax Credit

Save the credit! Here is the text of an email newsletter from Senator Johnny Isakson. I agree with his efforts and I hope you contact YOUR representative to push this important legislation!

Text as received in his email:

"Dear Friends,

This week was another busy one in Washington as health care reform dominates the headlines and as momentum picked up on extending and expanding the first-time homebuyer tax credit, which is set to expire on November 30, 2009.

On Tuesday, I testified before the Senate Committee on Banking, Housing and Urban Affairs about the need to further restore the housing market and energize housing demand by expanding the first-time home buyer tax credit passed by Congress earlier this year.

I shared with the committee my personal experience as the President of a real estate company during the mid-1970s when Congress in 1975 passed a $2,000 home buyer tax credit. The credit drove buyers back to the market and ended the housing recession within a year.

During my 33-year career in real estate, I weathered four housing recessions and experienced many challenges and difficult markets, but never anything like the current housing market in America. America’s families have lost trillions of dollars in home equity as home values have fallen, and in some markets, continue to fall today. The current home buyer tax credit is set to expire on November 30, right as we are approaching the worst three months of the year for the housing market. It is imperative that we retain the momentum we have gained as a result of the current credit and go into the spring market with the increased consumer confidence necessary for establishing a viable market.

I believe the current first-time home buyer tax credit has made a difference. However, the real housing recession is not with first-time home buyers, but in the “trade-in” or “move-up” market in which Americans are putting off purchasing their next home.

I will offer an amendment to the legislation extending unemployment benefits that would extend and expand the current homebuyer tax credit. The amendment would keep the amount of the credit at $8,000, but would remove the first-time homebuyer requirement, extend the tax credit until June 30, 2010, and raise the income limits to $150,000 for an individual or $300,000 for a couple.

For purchases made in 2010, taxpayers would be able to claim the credit on their 2009 income tax return. Homebuyers would not have to repay the credit, provided the home remains their principal residence for 36 months after the purchase date. However, this 36 month recapture provision would not apply in the case of a member of the Armed Forces on active duty who moves pursuant to a military order and incident to a permanent change of station.

To view my testimony from Tuesday’s Senate Banking Committee hearing, click here. "


Headlines to ponder...

Take a glance at the headlines below. I have two questions for you: why has the $8,000 tax credit for 1st-time home buyers been extended? Why has it not been expanded to ALL buyers? Why are we wasting so much time on health insurance? I am outraged at the government losing sight of what is truly the most important thing in our country right now: THE ECONOMY! Read the headlines; do you agree with me?







And now back to your regularly scheduled program already in progress: "How Congress will raise taxes on all Americans and effectively kill small businesses, while not fully accomplishing the stated goal of insurance for all (while bankrupting this once-proud Nation)".

Oh what the heck--one last thought: what got us in this mess? Housing. What will get us OUT of this mess? HOUSING, not insurance....

Wednesday, October 14, 2009


Did you hear that cheer? I think I may have heard it all the way down here in Georgia--the Dow briefly went above 10,000 today, the first time in a year and up greatly since hitting a 12-month low of 6547.05 in March 9th. Will it close that high today? Who knows, but it's a huge psychological boost and futher proof that we are slowing coming out of this recession. HOWEVER, we still have the double bogey of unemployment and the potential for inflation.

Speaking of boosting the economy, take a second to contact your representatives in Congress to recommend that they extend the $8,000 tax credit for first-time homebuyers AND it would help if you pushed them to open that tax credit up for ALL homebuyers! That would truly boost the economy and remember that this mess started with housing and housing can bring us back!

Use this link to find your representative!

Wednesday, September 23, 2009

Re: Yesterday's Environmental post

This article from Britain is pretty frank in its assessment of current US politics; much more so than my rambling posting yesterday. Pretty strong words for a country not used to 'leading the world', eh? I'm still a proud American, but we need to get back on track--and fast!

Tuesday, September 22, 2009

Death to the USA?

It seems that the US is under attack on many fronts. One of which is from within, as we battle over (fill in the blank, or just say 'everything') in a highly partisan fashion, as if party 'loyalty' (read: special interest groups and lobbyists, or just say MONEY) is more important than our country. BOTH parties are guilty and I am ashamed at our government. PERIOD. It makes me want to go read Vince Flynn's Term Limits again! We are also under attack from terrorists here (arrests in NYC and Colorado?) and abroad. Regardless of that fact, and how G-20 wants to further emasculate our country, I hear today that the UN wants us to step it up re: climate change. Likewise, President Obama pledges that the US will do its part to reduce greenhouse gases and emissions. I actually agree with him in principle. While I do think Al Gore is an alarmist, self-serving person (with tainted 'facts' to support his beliefs), climate change is something for us to deal with. While I don't buy into all the arguments (and vehemently argue that 'cap and trade' is the worlds largest shell game) I feel that we CAN do so much more to work on reducing emissions.

Today's rant? The UN wants us to curb emissions--the main emissions are from our coal-fired plants. I know that most of our utilities are entrenched with this technology. Likewise, the coal 'scrubbers' to clean the emissions are incredibly expensive. Who pays for that? Not only do the utility companies, but WE pay for it as well. However, the utilities have to 'ask' to raise rates and the PSC won't always allow it, so the utilities continue to put off implementing scrubbers as long as possible; can't say I blame them!

What is the white horse for utilities? Windmills are cool (check out the photo from Maui, Hawaii) but not all areas are conducive to generating the power necessary to run our utilities; likewise, how do you get the power to the people (sorry, easiest phrase to use!). The best option may be nuclear power. Yep, I said the n-word (not THAT n-word, but it's almost as offensive to enviromentalists!). I acknowledge that the spent fuel is an issue, but nuclear is a great alternative; an alternative that finds great success throughout the world--in countries without as much regulation. If we can run a fleet of nuclear powered submarines, why can't we figure out how to build a 'standardized' nuclear power plant? Figure out an easily duplicated design and BUILD IT. Clean power; ask the French! 3 Mile Island was a mistake as was Chernobyl. We are one of the most high-tech countries in the world--surely we can build a new plant that is safe? Make that a priority, Mr. President; that will be a great legacy for the future of our country!

Monday, September 21, 2009

Mixed bag Monday

Economic indicators missed their mark today by a tenth. Expectations for the index to rise .7 percent were off resulting in a smaller rise of .6%. While the markets are currently on 'sell' mode this morning since the numbers were off, I do think we need to focus on the fact that this is still a POSITIVE number, albeit off the pace expected. So we've had five months of rising indicators but unemployment still lingers. Yes, temp firms are seeing some increased business but not for temp to PERM jobs as of yet. Here in ATL, economists feel that job recovery is coming in 2010 but views differ on the amounts of job increases--but most feel that it may be later in 2010 than earlier so we're definitely not out of the woods yet.

What about real estate? Interest rates are still currently low, but the expiring $8000 tax credit could cause big problems AFTER November 30th as the tax credit incentive disappears. Senator Isaakson is fighting for an extension; hopefully he will be successful (insert rant about this credit being only for 1st-time buyers here).

Don't forget that we still have a lot of unsold inventory, including a lot of partially-built subdivisions. Factor in all the foreclosures in the market and there are still inventory concerns. If you wanted to buy, you have a golden opportunity. If you STILL rent you are an idiot (unless you have a really good reason to have temporary housing--if not, as you throw away your rent each month, remember that you're an idiot :) Keep the faith; like our rain, this can't last forever! Happy Monday! Bo

Wednesday, August 26, 2009

Latest newsletter: "Everything's Coming Up Roses"

Suddenly everyone is an optimist! Don't get me wrong, I am truly hopeful that our economy is out of the dumps. As you already know from my emails and blogs, I have always been a huge cheerleader for our economy. We have seen so many reports that match Ben Bernanke's earlier predictions for a 3rd or 4th quarter recovery. On Tuesday we heard that metro ATL home prices increased in June, gaining ground for the 1st time in 25 months! The downside is that prices are still down 14% from 2008 and over 20% from the peak in 2007. The National Association of Realtors paints a rosy picture as well showing July sales rising 7.2%, beating estimates. Likewise new home sales were up 9.6%. So the monster that caused this recession (housing!) may be growing weak.
So why am I nervous? Well, those first-time buyer credits expire in December. Realistically (with all the issues related to getting credit approved and appraised values) you need to be under contract in early October to close by the end of November. What will happen when those credit expire? Likewise, unemployment may top 11% in Georgia per local reports--figures show unemployment rose in 26 states and fell in 17. Finally, what if the government stops spending (or if investors stop buying our bonds)? One word: Inflation. We are definitely in a better position right now, but we're not out of the woods yet. Drive past local strip malls and you'll see a lot of "For Lease" signs. While single-family housing is picking up, commercial properties (and their loans) may be the next problem facing our economy. I may not have b een excited about economics while sitting in my college classes, but I can certainly now say that economics are no longer boring!

My dinner with Ben

"So a few weeks ago I had dinner with Ben Bernanke..."

Let that sink in for a moment... Damn, doesn't that sound cool? You'd think I was really tuned in to our # 1 economist and one of the top 5 most powerful men in our National Government. Well, it sounds cool AND it actually is true, but it's not as it sounds. The key is exploring the "with" in my first statement!

I recently took Susie to Puerto Rico for her birthday (a flight/hotel deal online was too good to pass up!) and chose a nice restaurant to celebrate on a Sunday night. We were told that we could not have reservations until well after 8pm, so we chose to pack up and go for the old-timer's early bird special (translation--we took a 6:30pm reservation). We were perplexed to find that the restaurant was virtually empty (I think there were 1 or 2 couples there). They had 2 large tables set up for what turned out to be a wedding party, but there were a ton of servers so they seemed to have coverage for the party AND the rest of the restaurant (remember, I used to work at Houston's and we were definitely a busy restaurant!). In any event we were enjoying our appetizers when the wedding party arrived, all aglow and happy and everyone took their places and the servers took orders, etc. As I was facing them, I couldn't help but glance over there from time to time, despite how fabulous Susie looked (see?). I finally noticed that one person in particular looked familiar. I told Susie that I thought it was Ben Bernanke. She couldn't really turn around as they would notice (you can see the table over her shoulder) but I was really convinced it was him! (as a sidebar, this tells you what a geek I am, as some famous football/baseball/basketball, etc. player could have been sitting right next to me and I wouldn't have known, but Big Ben is on my radar!). I asked our server; he said he didn't know but there were "men in the bar" with him, so then we knew! (He later confirmed that it was him). We later figured out that the restaurant was probably told not to allow anyone else to be seated around the time their dinner party arrived, because they all came in around the time that we wanted reservations. When we left, we saw that there were several casually dressed Secret Service (our guess) agents in the bar--imagine how many were around that we didn't see? I will say that is something our government DOES do well; kudos to the big guys with their radio earpieces!

I risked my life to bring you this (horrid) cell phone photo (good luck making him out as the light was poor!). In all honesty I really wanted to say hi, get an autograph, etc. but I couldn't bring myself to do it (irrespective of the armed men in the bar) as it was someones wedding party and it was "their" night--not my time to interrupt the festivities to shake Big Ben's hand... Maybe I'll get a chance someday!

Thursday, August 20, 2009

2 Headlines to chew on

"Peach State great for retirees" and "Match.com: Atlanta among least expensive cities for a date". As for the retirees, evidently we have a lot of good tax breaks for Seniors and no inheritance tax. As for the dating set, while ATL is #11 out of 25 surveyed, our 'real level' should be higher as the top city was Pittsburgh, followed by Detroit. Indianapolis and St. Louis were also ranked higher than ATL. Then again, you'd have to move there, so balance the equities on that one... This was based on the price of a 'casual dinner' and two movie tickets. So get out there and see a movie tonight :) Cheers, Bo

Friday, July 17, 2009

Did you miss the bus?

It's time. We're hearing a lot more news about the economy improving, but we're also seeing rates rise. Unfortunately, it seems like inflation will rear its ugly head soon. People, rates are still LOW at 5.5% but they will be going up soon. How high? Who knows! Let's put rates into perspective--over 9 years ago (5/25/00 to be exact) I bought my Smyrna house (it's on the market again, by the way!). With 20% down and a 777 credit score, would you care to guess what the current rates were? My 30-year fixed rate "plain vanilla' mortgage was at 8.25%!!! That was the best out there at the time! I refinanced to 6.5% that October (and much lower than that later on), but I just want to point out that rates are constantly changing.
What about today and what's the 'bus' comment about? You know all the people waiting for the "perfect" time to buy? Well, they missed it. In all honesty, I'd say LAST MONTH was the perfect time to buy. Why? Rates were at their lowest, the media was still reporting 'gloom and doom' and inventories were still high. Now? Gee, you might actually hear some POSITIVE news on the economy out there! Let's review--unemployment claims were lower than last month (albeit still much higher than in 2008) and temporary staffing companies are doing brisk business; retail sales rose (May figures were the largest increase in 4 months); auto sales rose last month (thanks to incentives) and manufacturers are seeing some improvement as well. As far as real estate is concerned, new home (and resale) inventories are dropping and prices are slightly up, but again we have a lot of ground to regain after 2007/2008.
What are the negatives? Summer gas prices are up (and oil is back over $70 a barrel); Georgia is still # 7 in the nation for foreclosures and many state and local government agencies face staffing cutbacks and tax revenue shortfalls. I know that MY home's price dropped in value over the past year so I appealed the county's recent valuation--you may want to do the same. I know that will hurt my county, but I am hopeful that they can make some 'strategic' cuts that will save our tax dollars (I wish the US government would do the same). Finally, the credit clampdown may stall our recovery--rates are climbing and businesses are still having trouble financing inventory. If rates continue to go up, we'll have a 'whole new ball game'. Let's hope that doesn't happen. Me? I'm focusing on the good news and hoping for the best--you (and your clients) should too (and it's STILL a great time to buy!).

Wednesday, June 24, 2009

Today's News A Mixed Bag O' Nuts

Free for all today; pick one and run with it!

May new home sales dropped .6 percent (sales prices up from April though)
Durable Goods orders rise 1.8% in May (vs. expected decline of .6%)
Mortgage Applications RISE 6.6% for the week ending 6/19/9
(My fave:) Fed mulls tweaks to economic revival programs
Energy prices drop as gasoline supplies surge

Here's the deal--we are seeing a lot of positive things out there. Yes, rates are up a bit and inflation is still a threat. The Fed has to walk a razor's edge in terms of encouraging our economy but not ignoring the fact that inflation could absolutely kill our recovery. The Fed continues to auction bonds and there is a fear that demand may fall due to lower yields. If you raise yields, you will more or less raise long-term financing rates as the two are closely tied. So again, I push you to purchase or refi NOW and don't be greedy about that extra .25 point as you may face something much worse in the near future.

With that being said, the economy should begin to emerge out of our recession in the Fall, but (this is a big but) unemployment will continue to climb well into 2010. Economist Lynn Reaser (VP of National Association for Business Economics) was quoted saying "The Fed is sending the message that the economy is making progress toward a path of recovery, that the credit markets appear to be healing and inflation is not going to be a problem." I hope she's right (and other economists' prediction that we could see improvement in the July-Sept quarter). Hang in there!

Wednesday, May 27, 2009

Random thought on Buying a Car

My Dad decided he was going to buy a Volkswagen Van last week. Turns out he called a dealer in a nearby town and some fool tried to get him to 'come in and talk' before giving him a price. My dad is not online and doesn't have the patience (or skills) for internet research. He's not afraid of calling around to get a price, however, and I'm amazed that this guy pulled the old 'let me ask my finance manager' routine.

He ended up calling another dealer in a bigger city and they simply gave him a price. After calling Costco to find out if they had a better deal, he tried one more dealer (as dealer #2 didn't have an option/color combo he wanted). After all was said and done, he got the deal he wanted on the car he wanted and idiot #1 in Evansville Indiana will NOT be getting his business! I wish I was so 'flush' that I could turn away customers!

Are you (or your staff) turning away sales? I'm sure not! While we're a small firm, it makes me wonder how larger organizations are faring--are they unwittingly turning away business due to outdated practices/poorly trained staffers? I hope so as our customers get to see the value of our SERVICE! Thanks for your support!

Headlines of the day tell an interesting story

I really don't need to do more than quote the headlines to give you an idea of what is going on. From the Atlanta Business Chronicle's email update: "EXISTING HOME SALES RISE" AND "REPORT: HOUSING PRICE DECLINES SLOW" Both good news, right? Absolutely! But remember this one as well: "MORTGAGE APPLICATIONS FALL, RATES RISE". Here's the takeaway from all this--the more 'cheerful' news about the economy will (hopefully!) get people off the fence. However, what really needs to happen is to get these people hopping NOW as rates will continue to go up as the markets improve. It's a fact-rates tend to go down when 'bad things' happen so take advantage of what's left of the economic malaise affecting our country. Don't wait for North Korea to rattle their sabres and spook the market-it's time to act now (and my usual caveat applies-rates may go up/down/remain the same, but will your LENDER or program be there when you decide to get a loan? I sure hope so!)

Cheers! Bo

Thursday, May 7, 2009

Read this headline: "Mortgage rates rise as outlook improves"

What does that mean? It means GET OUT THERE AND LOCK NOW and/or BUY NOW! For the article, go to the Atlanta Business Chronicle's site or click here. Good luck! Time is of the essence!

Thursday, April 23, 2009

Uh Oh...

Well darn. Bad news/Good news: The NAR (National Association of Realtors, a big cheerleader for our industry) says that "used" home sales fell 3% from February to March. Looks like we're not out of the woods yet (not that we expected that 'poof' the real estate market was going to just go gangbusters this Spring). On the good news part of this posting, sales prices were up a bit from February, though still DOWN. (2008 sales prices were $200K, in February 2009 they were $168K, in March $175K). SO, hopefully April showers will bring May BUYERS! Hang in there...

Go buy THIS house!

Tuesday, April 21, 2009

Of God, BMW Safety, German Engineering and "Buy American"

It's interesting to read about the failings of the US auto industry. Of late we (the US Government, a/k/a the taxpayers) have pumped money into the major US companies only to hear that GM may still be forced into bankruptcy and Chrysler's possible Fiat merger may be off. Common thread? Unions... If wage concessions don't happen (and fast) bankruptcy will loom large for GM and Chrysler runs the risk of being split up and sold in pieces. I have owned a few Chrysler products and enjoyed them and I actually have a lot of respect for US auto makers right now. My son and I visited the NY Auto Show preview on our recent Spring Break trip and found several hot looking models (and I actually mean the cars!). Cadillac had a cool CTS wagon that caught our eyes and the Pontiac G8 is a hot rod. The upcoming Ford Fusion Hybrid gets an astonishing 40 MPG I've heard and the new Focus will finally be a decent looking European model. What does all this mean? IF the industry survives the economic downturn, there are many great vehicles to consider. Prices are low, dealer price concessions are high and again, quality is up. After you buy your home (or refi your mortgage) go buy a car!

Our 'fleet' of autos contains nothing newer than a 2000 model year and all have mileage over 100,000 miles. They are also all older German luxury cars and we do pay a premium for parts and service. You know what? If I could, I'd replace them with an expensive German car all over again. Why? In a word-SAFETY. On her way to work last Monday, my wife was in an offset head-on collision (she's safe, by the way, just banged up and sore) in our 2000 BMW Z 3. The car was a total loss, but it did exactly what it was designed to do and that was protect Susie at all costs. Thanks to divine intervention and great safety features she was safe. The car, well, not so much. See for yourself; both airbags blew and the seat-belt tensioners did their trick and the engine dropped down so that it did not intrude into the passenger compartment (the driver's door opened and closed fine even after the wreck!). I have personal knowledge of 3 horrific BMW wrecks and each time the driver walked away safely, my wife included (well, if we can get her neck/chest/ankle to not be so sore). If you have the wherewithal to purchase a German car I'd say go for it. Our cars are all used and were bought from family members so we got good deals. If you seek safety (AND sporty/luxury) don't just look to Swedish imports; try the Germans... My 2 cents.

Either way--go buy stuff; the economy needs you!

Wednesday, April 15, 2009

Newsletter Comments from 3/31: Thoughts on the Economy

Rates are low, purchases are up, sales prices are creeping up--does this mean we're out of the woods? NO. Today's news notes that January 2009 sales prices were actually at a record low (per Case-Schiller index) and it's true that many foreclosures are still 'waiting in the wings' to further lower prices. If you are a buyer, you're in great shape. If you're a seller, it can be tough to stomach! The National Association of Realtors (yes, that's real-TOR, not real-A-tor!) predicts median prices to fall almost 5% this year, with a gain of almost 4% in 2010. Yes, they are ordinarily 'optimistic' but it seems plausible now that we've seen some slight rise in pricing in February. One month does not a trend make, however!
What can really kick-start our economy? First-time homebuyers--Yes, I know that this is contrary to my last rant-I have since learned that 40% of homes sold in 2008 went to 1st-timers. If they realize that they can 'pocket' an $8,000 Federal tax credit (versus last year's $7,500 "loan") if they buy this year AND if Gov. Perdue signs HB 261 (giving ANY home purchaser a $3,600 GA tax credit for 2009) we should see a lot more activity. If ANY of this is news to you, let me know and I will fill you in. Please pass this info along to ANYONE considering a home purchase-it may be just enough to have them overcome a) fear of falling values and b) greed (yes, greed). It's human nature to fear that you didn't get as good a deal as someone else, right? Yes, someone may get a lower price for a new home than you, but does the house suit YOUR needs TODAY? Isn't that enough to keep you from paying your landlord's mortgage?? Same scenario with rates-you MAY save a few dollars by waiting, but you may lose your chance at a low rate completely!
I get the awesome opportunity to hand someone the keys to their new house. I have been hugged, have seen tears of joy and even endured some piercing screams. It's why I've always said I practice happy law rather than focusing on negatives in life. I hope you can come see us soon and witness the spectacle!

Wednesday, March 11, 2009

"Big Ben" speaks!!!

Fed Chair Bernanke's comments at the Council on Foreign Relations outlined potential new regulations for the financial markets which seemed to be confidence-inspiring. How is the US Fed Chief 'newsworthy' as it relates to foreign relations? Prior expansion in the US fed a desire for investments in our economy from overseas. Where financial crises in the 1990's (case in point-Japan) were largely regional, this current mess is global. So a lot of $$$ came to the US, and fueled a lot of risky investments. Well, we all see what happened. Big Ben (Bernanke) noted that we obviously have to have free-flowing credit and stability. He also outlined (in specifics!) what needs to happen. In a nutshell-oversight and regulation. He addressed several factors. "Too big to fail" is not a good thing. Large financial monsters grow so big that their tentacles reach into all aspects of our financial markets. Their success breeds additional risk-taking as they have the resources to 'roll the dice' that smaller concerns can't try. BB feels that risk-management practices must be implemented in large companies across all aspects of their inter-related businesses--even non-bank divisions. This authority needs to reach across the entire company-not limited to one division, for example. A second focus would be to strengthen the financial infrastructure (his analogy was to work on the "financial plumbing"). Specifically, the mechanisms that allow trades to occur need to be tightened. Temporary fixes in light of the Bear Sterns collapse and Lehman bankruptcy need to be clarified, expanded and made permanent. He suggests the Fed Reserve system may be the best resource to oversee payment and settlement systems. Next, the word of the day is "proclivity", which means a natural propensity or inclination or predisposition. In simple terms, banks have to keep a lot of reserves. When things are good, they lend a lot of money. When things are bad, they don't. SO, things are bad, which means... no credit. He recommended changing some accounting standards to allow banks to 'go out on a limb' and actually LOAN money without angering the Gods (the bank regulators). Another recommendation was to allow FDIC to build it's reserves over a longer period (from 5 years to 7 years). Finally, he notes that there needs to be a new Sheriff in town, in order to regulate and oversee the entire system in the US, which may take some tweaking of existing authority, as well as new legislative authority from Congress. It appears that he feels that regulatory authority in the US is currently too decentralized and it is time for someone to set the standard(s) and it appears that the Fed is the one to do it! Last shot-all of the above will help smooth the global impact of financial problems, but it cannot end domestic or global crises. It will (hopefully) serve to cut the current tidal wave of market ups and downs to smaller ripples on the world pond. Go Ben, go!

For the text of the entire speech, click this link.

Thursday, March 5, 2009

Rate report/Sales idea!

Freddie Mac's weekly report notes that 30-year mortgages bumped up a bit this week, from 5.07% to 5.15% this week. A negative? Not if you think about rates a year ago, when they were averaging 6.03%! So again, rates remain low so go buy today!

Another thought on the Stimulus plan (specifically my ranting about the $8000 tax credit for 1st time home buyers ONLY). I know it's not what we want, I know that it really isn't very helpful. HOWEVER, I have to think about all those young buyers out there. THAT is the big target-Gen X or Gen Y buyers that are renting. If you can find some of them, you can create some sales! Go hunting! Look in Starbucks or something :)

Last Newsletter info

Are you stimulated?

Well, the government keeps throwing money at problems and nothing is working. When will this madness stop? What intrigues me is how we've lost focus. Let's go back in time--what is this mess all about? HOUSING. Yes, banking is a mess, AIG is "too big to fail" and unemployment is like a cancer on our country right now. With that being said, Housing was the problem that brought our economy to a screeching halt. Housing prices up, sales stopped. Loans a mess, banks fail (or need to be bailed out, while cutting the credit lifeline). AIG? Wouldn't you know that it sold insurance to banks for loan defaults (sort of). Well guess what? Those 'great bets' started losing and AIG lost a ton as well. But again, where did this start? Housing. Stimulus? I think not. The bill put forth an $8,000 tax credit for first time homebuyers--not enough. I've said all this, so let's move on. The 'latest and greatest' plan is the "Making Homes Affordable" program that was officially unveiled today. If you are a good boy or girl and have been paying your mortgage, you may be able to 'refinance' so that your payments are more affordable. There are many 'what-ifs' concerning this and I'm not sure how it will work out. For more information, check out www.financialstability.gov. I will dig into this further and talk about it on my Economics blog, at right. Bear with me as there is a lot of info to digest! What's next on the horizon? Potential "Cram down" legislation could be coming this week. For reference, a bankruptcy judge may 'cram down' new terms to a mortgage company if the legislation passes. For example, a judge may be able to change/lower payments, interest rates and even principal balances! Again, this one is not ready yet, so stay tuned! My only comment to all of this? I am worried that people are going to just say to heck with it and stop paying their mortgages--not because they can't pay, but because they WON'T pay. This article seems to think it's due to negative equity--What I fear is a paradigm shift of borrowers giving up and saying "Who cares". Not a pleasant thought!

By the numbers
Recovery in 2009? Think YES!

Again we hear doom and gloom daily. Every once and a while the media 'censors' allow something positive to escape and actually make it into print. At the same time, however, any good news is currently tempered by some bad news. The current Fed "Beige book" report noted that conditions worsened in January and February (did you hear the auto sales reports yesterday? bleah!) When can we expect improvement? Unfortunately it appears late 2009/early 2010. Housing is stable more or less and there are hopes that purchases will pick up this Spring as buyers (what does that word mean? I forgot) start looking for homes. Foreclosures are a wild card right now-we should have many unfavorable re-sets (ARM rate adjustments) THROUGH 2010 and beyond. Not only that, the new legislation may keep some people on the fence. Then again, now that it has been passed, perhaps people can get a better feel for the current climate and finally BUY. Another issue? Many economists note that unemployment will continue to rise in the months to come. Even an optimist like me has to take note of the fact that someone without a job cannot buy a home, no matter how cheap it is or how low the rates have dropped. Georgia State's economist thinks that losses will drop for the next two years and paints a pretty bleak picture. Well, for this NON-economist, I am betting he is wrong! I wish I had some extra cash (don't we all??). I would love to purchase some stocks (just ask the Prez!) or better yet-some REAL ESTATE! Go get 'em!

Tuesday, March 3, 2009

Oink Oink Oink! These little piggies LOVE earmarks!

Congress should be ashamed--House, Senate; Republican, Democrat. All are to blame. My disgust can be summed up with one word: EARMARKS. What happened to President Obama's campaign promises? Looks like we're back to business as usual as evidenced by signing a bill laden with these earmarks (though I think his patience will drop and he will call the "leaders" (quotes and/or sarcasm fully intended) to the carpet). What of all this spending and earmarks? It's true that Republicans blew it by spending too much over the past 8 years. I heard something today about these earmarks--a 60-40 split based on party lines. While 60% of the earmarks were from Democrats, I was intrigued to find that of the top 10 pork spenders SIX are Republicans! Shame on ALL of you! If we truly need stimulus, this isn't the way to go. Change? I'm still waiting! Our economy needs jobs, not more government. What's the old joke about the scariest line in the world? "I'm from the Government, and I'm here to help." Ha.

Wednesday, February 25, 2009

Take this quiz!

I was amazed to read that of 2500 Americans taking this quiz, the score was under 50%! I was proud to get 28/33 right for a score of 84.85%, though admittedly I guessed on a few! Take the quiz and see how YOU do!

Thursday, February 19, 2009

Quick positive links...

ATL Federal Reserve Bank Chair thinks things will improve by 2nd half of the year, per a speech today in Birmingham. As always, however things can always change. I still have my rose colored glasses on and view everything in a 'glass half full' point of view. We'll see! My hope? Improvement by SUMMER (prior to 2nd half of year). Bo vs. a Federal Reserve President... I'd like for me to be right not for bragging rights but for all our wallets! As I always say, time will tell!

Even Ex-Prez Carter sez it's not all that bad... In comparison of course! Of course, one of the worst economic downturns in my lifetime was during his Presidency... Interesting contrast!

Finally, interest rates at ALL TIME LOWS! (DUH--get out there and REFINANCE TODAY or BUY A HOME!)

Monday, February 16, 2009

Stimulus FAILURE and Al Qaeda on the move?

I am only going to focus on one portion of the bloated mess that is our "Stimulous Bill": a 1st time homebuyer credit of $8,000.00. Let's see--what started this entire mess? REAL ESTATE. Not autos, not jobs, but HOUSING. So let's cut off our nose to spite our face and limit the thing that could finally light a fire on the many fence-sitters out there: a tax credit for ALL home purchasers! That's what the credit was intended to do, but that's not what we ended up with. Four letter word for all this? FAIL. My task for you: can anyone tell me who changed this tax break from ALL homebuyers to only 1st-timers? I really want to know so I can write them personally. Republican or Democrat, they are FOOLISH to limit this.

While I'm on a rant, why not scare the hell out of you too? Read this article and see what may be next for our weakened country.

Tuesday, February 10, 2009

Georgia Rates are going UP! LOCK & LOAD!

According the Atlanta Business Chronicle, rates are going UP! We are already over 5.25%....!

On the fence? GET OFF NOW!

Tuesday, February 3, 2009

Good news... sorta...

Well, home sales crept up a bit in December thanks to cheap prices and even cheaper money. Looks like the seasonally adjusted index of pending sales for "used" homes rose 6.3 percent in December from the month before. Yeah, I know that's a LOT of foreclosures being sold but at this point, any positive news is just that--positive! As far as home values, the US average dropped over 18% but the ATL market only dropped around 11%. Again, we didn't truly have that much of a bubble--what hurt ATL is the number of people in over their heads (which led to foreclosures).

For a 'lesson' on value, consider this: I happened to do a refinance in someone's home the other day. It was a beautiful home that turned out to have appraised for around $15,000 LESS than what they bought it for 2 or 3 years ago. One culprit may have been the For Sale sign across the street with "REO" in the title (REO = Bank Owned). They luckily had plenty of equity in their home so they could easily refinance, but it could have been a huge negative for them if they needed a higher loan amount. But that home across the street was just as pretty and could probably be 'stolen' from the seller. That will kill values for surrounding homes, but again, you are seeking a good deal to BUY so what are you waiting for???

Tuesday, January 20, 2009

Want some light reading?

Here's the new Economic Stimulus bill! And with such a friendly title like the "American Recovery and Reinvestment Act of 2009", how can anything go wrong? Most likely something evil is buried in the 258 pages of the bill!!! Yikes! And you think you're afraid to read Atlas Shrugged? Reading all of this sounds horrid!

BTW-the Dow closed down 330 points today... No 'bump' from Obama I guess. Hopefully something positive will come out in the news and give Wall Street some 'comfort' or something...

Monday, January 12, 2009

Broken Record alert: more Atlas Shrugged 'stuff' (an important read!!!)

I received the following story from the Wall Street Journal opinion page in my in-box today and was not surprised to see that it more or less echoed what I've been saying for months and months--we are entering a scary period in history where fiction is turning into fact! No, I am not bashing Obama at all because he's not in control... yet. I really hate the fact that our government is such a mess. Why can't we have term limits? (for fun, read Vince Flynn's first book of the same name) I really think people get elected and forget what they were doing to begin with. Would I get used to corporate jets and executive privilege? You betcha! Every single member of Congress needs to remember that they are accountable to us. But if we have to remain tied to 'entrenched' interests, we have an uphill battle. Do you think we could outspend someone who's been attached to a Senate "lifer" like Teddy Kennedy or Robert Byrd?

Okay, off on another tangent, sorry. Bottom line-what's the balance between greed and capitalism? Self-interest vs. 'the good of the country'? Is YOUR self-interest best for someone else? That's the key issue (and why I'd say I'm philosophically a Libertarian) and one that's not readily discussed when you're playing the OPM game (Other People's Money). Please: go buy Atlas Shrugged and READ IT. If you don't have the stomach for a 1000 page novel at least read this. I assure you that it's worth the read. No, it's not always a 'page turner' but it's important stuff--then and NOW

Tuesday, January 6, 2009

Of "sightings" and spending...

It's odd, we are definitely in a recession and spending has dropped off considerably... wait a minute, is that true? Yes, I know statistics show that, but all I can say is that it's not what I SEE out there! We went to the Dawsonville outlets the weekend after Christmas (Brooks Brothers gift cards were PERFECT gifts for me this year : ) and the place was PACKED. We burned an Ann Taylor card for Susie at Lenox and the mall was very busy too. Likewise, we celebrated our 9-year old's birthday at "American Girl" at North Point Mall last weekend and THAT place was packed--and if you have daughters in that age group, you know how expensive those dolls are! Ditto for Costco and Sam's, where I've had to pick up supplies for the home or office; still busy. So people are spending, at least in ATL metro!

On top of that, living in Atlanta, we are somewhat jaded by monster homes and exotic cars. In the past few weeks, here's a small list of 'toys' I've seen around (DRIVEN, not garage queens): Rolls Royce Phantom ($325K+), Porsche 911 Turbo (S190K?), Bentley Flying Spur ($200+?), Bentley coupe (ditto), Ferrari F430 ($200+), Maybach 57S (if you have to ask ; ) Likewise, there are tons of other precious metals cruising around. While they may be mortgaged to the hilt, I still say BRAVO to them, as they have done SOMETHING to earn those toys. God Bless America, the land of the free, home of the brave and all that... I hope that we can hold on through Spring (hopefully the Feds' recently released minutes are correct that we will be out of the woods by that time). All I can say is if you have good credit and your home's value is still pretty good, REFI NOW as rates are UNDER 5% today! When you do refi, you know where to close it : )

Friday, January 2, 2009

Shhhh.... Good news!

Don't tell the media, but there was a bit of good news today--the Dow closed over 9,000 for the 1st time in 2 months! Can you believe how low it's dropped over the last few years? But what about falling gas prices? Ditto! $4 no more and we're loving it. More bad news in the media today (manufacturing activity dropped quite a bit) and as always, home prices, well, how should I say this... they still SUCK. In any event, the "Metro Mike" billboards here in metro-ATL show a positive trend as well--remember when it rose to over 113,000 unsold homes? That's about when they STOPPED showing the actual number and put up pithy 'BUY NOW' messages. Well, it's now back down to the low 80's (look here; lower left of screen) and I see that as positive. Final shot--I just closed a new home purchase for a couple with a 1st mortgage of $417K (with a 2nd mortgage HELOC-remember those??). The interest rate was a mind-boggling 4.875%. WHAT ARE YOU WAITING FOR??? GO BUY NOW!