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!
Thursday, November 19, 2009
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 :)
*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...
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?
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. "
WAY TO GO JOHNNY!
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. "
WAY TO GO JOHNNY!
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?
FED SURVEY: HOUSING, MANUFACTURING DRIVE RECOVERY (10/21)
BERNANKE URGES CONGRESS TO ACT NOW ON OVERHAUL (10/23)
OBAMA TO REFOCUS BAILOUT ON SMALL BUSINESSES (10/21)
US HOME SALES RISE 9.4% IN SEPTEMBER (10/23) Sidenote-why? THE TAX CREDIT!
23 STATES REPORT HIGHER UNEMPLOYMENT IN SEPTEMBER (10/21) Yes, GA was one too!
HOUSING STARTS RISE IN SEPTEMBER; WHOLESALE PRICES DIP (10/23)
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....
FED SURVEY: HOUSING, MANUFACTURING DRIVE RECOVERY (10/21)
BERNANKE URGES CONGRESS TO ACT NOW ON OVERHAUL (10/23)
OBAMA TO REFOCUS BAILOUT ON SMALL BUSINESSES (10/21)
US HOME SALES RISE 9.4% IN SEPTEMBER (10/23) Sidenote-why? THE TAX CREDIT!
23 STATES REPORT HIGHER UNEMPLOYMENT IN SEPTEMBER (10/21) Yes, GA was one too!
HOUSING STARTS RISE IN SEPTEMBER; WHOLESALE PRICES DIP (10/23)
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....
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