Economic update-August 1, 2014

Economic Update for the  ending August 1, 2014

Q2 GDP at 4%, beats estimate of 3% The Q2 GDP blew estimates out of the water, this is in result of a surge in Inventories and Fixed Investment spike, both of which added over 2.5%, while exports added another 1.23% to the GDP number. The economy also received a boost from business investment, government spending and investment in home building. Trade, however, was a drag for a second consecutive quarter as some of the increase in domestic demand was met by a surge in imports. Domestic demand rose at a 2.8 percent pace, the fastest since the third quarter of 2011. It increased at a 0.7 percent pace in the first quarter. Growth in the second quarter was driven mainly by consumer spending and a swing in business inventories. Consumer spending growth, which accounts for more than two-thirds of U.S. economic activity, accelerated at a 2.5 percent pace, as Americans bought long-lasting manufactured goods and spent a bit more on services. Consumer spending had braked to a 1.2 percent pace in the first quarter because of weak healthcare spending. Despite the pick-up in consumer spending, Americans saved more in the second quarter. The saving rate increased to 5.3 percent from 4.9 percent in the first quarter as incomes rose, which could mean more future spending. The “second” estimate for the second quarter, based on more complete data, will be released on August 28, 2014.

Fed Meeting Breakdown. The Federal Reserve meet this week and announced they will continue with the sixth reduction, phasing out QE3—again a$10 billion cut. QE3 purchases are now comprised of $15 billion in U.S. Treasuries and $10 billion in mortgage-backed bonds monthly, to begin in August. The taper loosens further the artificial cap that the Fed has placed on mortgage rates. As QE3 shrinks, mortgage rates are expected to rise. The moves did not surprise Wall Street. The Fed Funds Rate is expected to remain near zero percent deep into 2016; and the Federal Reserve has been vocal that QE3's wind-down would be measured and steady, barring economic shock. The moves did not surprise Wall Street. The Fed Funds Rate is expected to remain near zero percent deep into 2016; and the Federal Reserve has been vocal that QE3's wind-down would be measured and steady, barring economic shock.

The Fed signaled in its monetary-policy statement earlier this week that interest rates will remain low for an extended period. Policy makers took note of improvement in labor market, but they said a range of labor market indicators suggest that there remains significant underutilization of labor resources. With a strengthening labor market, Fed is expected to further reduce its purchases of Treasury bonds at a pace of $15 billion per month rather than $20 billion per month and mortgage-backed securities at a pace of $10 billion per month rather than $15 billion per month.  The assertion that the labor market is still far from normal could dampen speculation that declining unemployment and rising inflation will force the Fed to start raising its benchmark short-term interest rates earlier than expected in 2015. The statement conceded that inflation "has moved somewhat closer" to the Fed's 2% annual target. But it added that long-term inflation expectations remain stable.

Freddie Mac Mortgage rates hold steady; 30-year averaging 4.12% Freddie Mac's weekly survey came out yesterday and showed the average rate for a 30-year fixed-rate home loan is 4.12%, practically unchanged from last week's 4.13%. In the month before the latest surveys, Freddie reported the following averages for the 30-year loan, the most widely used home-financing option: 4.13%, 4.15%, 4.12% and 4.14%. The 15-year fixed rate mortgage edged lower to 3.23% from 3.26%. The 5-year Treasury-indexed hybrid adjustable rate mortgage averaged 3.01%, up from 2.99%, while the 1-year Treasury-indexed ARM averaged 2.38%, down from 2.39%. 

U.S. Adds 209,000 Jobs in July, Unemployment Rate at 6.2%. As long as wages remain stagnant, putting pressure on consumer prices low and keeping inflation below the Fed’s target rate, analysts remain doubtful that the Fed will shift their timing for rate hikes ahead of the current projected timeline for liftoff of mid-2015. The steady growth in jobs is encouraging, but it’s not sufficient, for us or for the Fed. We need more jobs, and we need higher wages. Wage gains remained sluggish in July. Average hourly earnings rose 1 cent from June to $24.45 last month, up 2% from a year earlier. The labor market isn’t delivering, but it’s making progress. And one sign of progress is that more people are actively looking for that job they hope is out there.

Stock Market Ends July in Dive, but Analysts Are Upbeat. Thursday was noted as the worst day in months for financial markets. The stock market ended July with the sharpest decline in the Standard & Poor’s 500-stock index since April, while the Dow Jones industrial index fell more than 300 points, enough to eliminate all of its gains for the year. Energy stocks fell the most after Chevron reported weaker oil and gas production. Exxon Mobil had reported disappointing production figures the day before. The Dow industrial average lost 110 points to 16,454 as of noon Eastern time. The blue-chip index lost 317 points the day before, its biggest one-day drop since February. The S & P 500 index fell 12 points to 1,918 and the Nasdaq composite fell 39 points to 4,329. The S&P 500 index is down 3 percent for the week and is heading for its worst week of the year.

Market Closed today with across the board drops. Dow fell .42 percent (-69.93), 16,493.37.  NASDAQ  fell .39 percent  (-17.13), 4,352.64 and S&P fell .29 percent (-5.52), 1,925.15.

Factors for the drop included weak corporate earnings from big companies such as Exxon Mobil, which also reported disappointing results this week. The S&P’s information technology sector is broadly lower, down 0.25% as investors sell tech stocks, with the notable exception of a few heavyweights like Apple, Facebook. Economic sanctions on Russia that have increased tensions with the West also played a role, as did Argentina's debt default Wednesday. And there's also the general worry by investors thatstocks are overpriced. For the last two years, investors have typically stepped in to buy any major fall in the stock market. A sell-off would often be met the following day with modest buying. Traders said that Friday's selling, on top of what happened the day before, is not a good sign.

US Government Bonds Rise after Jobs data. Treasury bonds rose today as the U.S. employment report for July soothed concerns that the Federal Reserve may raise interest rates sooner than investors expect. 10 year Treasury yield jumps to 3 week high. In recent trading, the benchmark 10-year note was 9/32 higher, yielding 2.523%. The 10-year note's yield has fallen from 3% at the start of the year. Bond yields fall when their prices rise. The two-year note was 3/32 higher, yielding 0.492%.The five-year note was 10/32 higher, yielding 1.699%. Yields on short-dated notes are directly influenced by the Fed's interest-rate policy, while long-dated bonds are more influenced by inflation which chips away the value of bonds over time.

Applications for U.S. home mortgagesfall this week as refinancing applications drop. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 2.2 percent in the week ended July 25. The MBA's seasonally adjusted index of refinancing applications fell 4.0 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, rose 0.2 percent.

Economic Update July 25, 2014

Economic Update for the week ending July 25, 2014

Home mortgage interest rates were unchanged this week at the lowest levels in over one year. Freddie Mac reported that the national average for a 30 year fixed rate was 4.13%, the same as last week. One year ago the rate was 3.31% and on January 1, 2014 it was 4.52%.   The 15 year rate was 3.26%, about the same as last week’s 3.23%. It is down from 3.39% one year ago and 3.55% on January 1. The 5 year ARM was at 2.99%, down from 3.16% one year ago and 3.05 on January 1.  The one year ARM was 2.39%,also down from 2.65% one year ago and 2.59% January 1.  Jumbo rates are very similar with the 30 year rate around 4.25%

The Commerce Department reported thatnew home sales in the U.S. dropped 8.1%, to a seasonally adjusted annual rate of 406,000 units, in June after 2 month of solid gains. Western states saw the lowest decline of just 2%. Economists did expect to see a decline after a large jump in May, but not 8.1%. Low inventory levels were to blame. Another aspect of the report focused on new housing far from cities as land for development is often “poorly located” and buyers often choose an existing home in a better location, according to the report.

Weekly jobless claims plunged last week to 284,000, an 8 year low. According to the Labor department this is a fresh sign that the recent labor market is recovering. This big drop beat expectations. It marked the fewest claims since February 2006.

The National Association of Realtors reported that sales of previous owned homes hit their highest level since October.  There were 5.05 million homes sold in the U.S. in June, on a seasonally adjusted, annual basis.  It was the most since October, but 2.3% lower than last June. One difference was the number of foreclosed homes sold. If you take out the foreclosed home sales, sales were up.

Inventory levels are at their highest levels in over a year. The supply of homes has climbed 10% in the last year. There is currently a 5.5 month supply of homes on the market, just shy of a 6 month healthy target, according to NAR.

The Labor Department  reported that theconsumer price index rose just 0.3% in June,  less than the seasonally adjusted increase of 0.4% in May. In the 12 months ending in June, prices were up 2.1% for the one year period. Gas prices jumped 3.3% in June as global tensions drove up prices.  That increase accounted for 2/3 of the overall  increase last month.

Zillow Inc. appears to be purchasing Trulia. These are the nation’s two largest real estate websites.

The Dow  dropped 123.23 points on Friday to close the week at 16,960.57. It was down -0.816% from last weeks close of 17,100.18. The Nasdaq closed at 4449.56, up 0.39% from last weeks close of4432.15.  The S&P 500 closed at 1978.34, up 0.006% from last weeks close. The markets surged earlier in the week with the DOW closing at 17,113.54 Tuesday on higher than expected second quarter corporate profits. Investors got bad news on Friday about the American shopper when Amizon.com and Visa Inc. said that the second half of the year was not looking as robust as originally expected. Visa stock dropped 3.6% on Friday.

Applications for U.S. home mortgages rose last week as both purchase and refinancing applications picked up, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes bothrefinancing and home purchase demand, rose 2.4 percent in the week ended July 18.The MBA's seasonally adjusted index of refinancing applications climbed 4.1 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, rose 0.3 percent.

As inventory has begun to increase we are seeing more choices for buyers.  This is a relief when showing property, and a relief for buyers. We are seeing more price reductions, which is difficult for sellers. The market is definitely changing to a more normal market. Many of you are complaining that prices are falling.  I don’t believe that prices are actually falling.  I think that some sellers just got lucky in  the last few months and sold homes for more that they should have as buyers got caught up in the heat of the market. Home prices are still far higher than one year ago, yet less than the very highest sales two or three months ago. We are even seeing appraisals come in higher than the current sales prices. New homes and totally remodeled homes are still in short supply and we are still seeing those homes selling for record prices. If your home or your listing is not selling it is definitely time to reduce the price. I do believe that prices will rise again next spring, but at a much more moderate pace.

Weekend economic update July 19, 2014

Weekend economic update July 19, 2014

Interest rates dropped slightly this week to the lowest levels in over one year as demand for mortgage securities increased.  This demand comes from investors feeling that mortgage securities may not return a high yield, but are considered very safe. Mortgages initiated in the past few years have historically low default rates. Higher qualifying standards are credited for this, but I would credit a low default rate to rising prices. The Freddie Mac Weekly Primary Mortgage Market Survey  showed that the 30 year fixed rate fell slightly to 4.13% down from 4.15% last week and 4.48% one year ago. The 15 year fixed was 3.23%, one year ago it was 3.52%. We are seeing rates on all loan amounts in the 4.125% to 4.25% range for 30 year terms and around 3.375% for 15 year fixed.

The 10 year Treasury note yield ended the week at 2.50%, down from last week’s 2.53%. It was 2.56% one year ago.

The Dow closed at  17,100.18. It was up 0.92% from last weeks close of 16,943.81. The Nasdaqhad another strong week, closing at 4432.15, up 0.38% from last weeks close of 4415.49.  TheS&P 500 closed at 1,978.22, up 0.54% from last weeks close. The markets began the week rising to record highs as corporate profits exceeded expectations. Thursday after it was reported that a Malaysia Airlines jet crashed the markets dropped sharply, especially Boing stock. The markets, and Boing stocks, recovered slightly later Thursday, and closed up Friday 123.37 when it was reported that the plane was actually shot down.

Citigroup settled their toxic mortgage securities case with the Justice Department for $7 billion.  This agreement is the latest in the federal government’s effort to hold companies accountable that made subprime loans, pooled and packaged them into bonds, and sold those bonds to investors. These bonds, many of which were rated AAA (the highest rating for the safest investments) turned out to be worthless, or close to it. Thus earning the name toxic assets, as those who held them had such loses that many banks, investment companies, investors and even governments became insolvent. This led to the largest government bailout in history, as banks, investment firms and even companies were considered “too big to fail”.

Bank of America  settled its case with AIG for $650 million this week. AIG had sued Bank of America for fraud on credit default swaps (insurance against losses on mortgage securities). Bank of America also offered $13 billion to settle with the Justice Department. The Justice Department’s latest demand is $17 billion. Both turned down each other’s offers. Bank of America reported legal expenses for the second quarter of $4 billion, drastically exceeding the estimated $471 million that was set aside. Their stock dropped as a result.

The Federal Reserve released its Beige Book report of anecdotal information on business activity collected from contacts across the nation. The fed reported that 5 of its 12 districts described the pace of growth as "moderate," with the remaining districts viewing the expansion as "modest."  "Most districts were optimistic about the outlook for growth," the Fed said. The report, compiled by the Federal Reserve Bank of Kansas City from data collected before July 7, fits in with employment, manufacturing and other data that have pointed to strong growth in the second quarter and buoyed the economy's prospects for the remainder of this year. Output contracted sharply in the first three months of the year as the economy was slammed by bad weather, a slow pace of inventory accumulation and the end of long-term unemployment benefits. The Beige Book found that consumer spending had increased in recent weeks in most districts, with automobiles dominating sales growth. Manufacturing continued to improve in all districts, with growth occurring across many sub-sectors, according to the report.

The positive economic news, high earnings, and gains in employment have left economists wondering why the Fed has not risen short term interest rates and why they are continuing to purchase Treasury bonds and mortgage securities under the QE3 program. These economists fear that waiting too long could lead to high inflation. The Fed has reduced their purchases of Treasury bonds and mortgages each month and plan to no longer purchase Treasuries or mortgages after October 2014, but plan on leaving short term rates at or near 0% until mid-2015.

California’s unemployment rate fell in June to 7.4% down from 9% last June! The state added more than 24,000 jobs in June, and more than 356,000 jobs over the last year, according to the U.S Bureau of Labor Statistics. The unemployment rate in Los Angeles County in June fell to 8.2% from 10.3% last year.

DataQuick reported that California home sales slumped last month from a year earlier as buyers faced tight supply and prices continued to rise. There were 39,254 homes and condominiums sold in June.  That was up 4 percent from May, a typical seasonal rise, but it was nearly 20 percent below the average for all Junes since 1988. In fact, DataQuick said sales haven't topped the average for any particular month in more than eight years. The median price paid for a home in June was $393,000, up 1.8% from May and up 11.6% from June 2013.  It was the highest median price for any month since December 2007, although well below the peak of $484,000 set in spring 2007, By comparison, the median price dipped to $221,000 in April 2009 after the housing crash. Low inventory has equated to lower sales. One reason for low inventory is low interest rates. With these historically low rates it has been much easier for people to buy new homes without selling their current homes. We have seen record numbers of people become landlords. One thing for sure, these people are going to create great wealth for themselves! I hope you are all out there investing in real estate for your future!

Economic Update July 11, 2014

Economic Update July 11, 2014

Interest rates dropped this week as did stocks after economic indicators in Europe and Asia showed slowing in their economies. 

The Freddie Mac Weekly Primary Mortgage Market Survey showed that the 30-year-fixed rate  was 4.15%. The 15-year-fixed rate was 3.24%. A year ago the 30-year fixed was at 4.51% and the 15-year was at 3.53%. We are looking at rates on all loans in the 4 1/8% range for 30 year fixed and about 3 1/4% for 15 year loans. 

There is little to no difference in rates between conforming  loans and jumbo loans. That is quite surprising. Conforming rate loans carry government insurance to protect investors on a portion of loan losses, while non conforming (jumbo) loans have no insurance on loses to cover investors. This means that conforming rate loans carry less risk to investors which is why historically their rates have been about 1/2% lower than non conforming or jumbo loans. In 2008 and 2009 jumbo rates reached 2% higher than conforming as nobody wanted to invest in uninsured mortgages! If you recall the Federal Reserve after taking short term rates down to 0% made the unprecedented move of beginning a buying  program of $80 billion a month of treasury bonds and mortgages to add liquidity to the mortgage market. Last year they began drawing back those purchases. The fear was that interest rates would rise quickly without their intervention. That has not happened. In fact, there is such a demand for investment in mortgages that the amount of liquidity has created lower rates in an attempt to do more loans. The last time so much money was available for mortgages they lowered qualifying standards to what is known as  sub-prime to  encourage people to borrow more. This time around new laws enacted do not allow qualifying standards to drop so dropping rates have been the tool used to entice borrowers to take out mortgages. It is unprecedented to have conforming and jumbo loans the same rate. The above explanation is the reason why I feel this is happening. It should also be noted that the reason for all this money being invested in mortgages and bonds is because of political turmoil and economic uncertainty throughout the world causing people to move money to the US markets. This is also one of the reasons we are seeing so much foreign investment in our real estate market!

The  10-year Treasury note yield rate ended the week at 2.53% down from last week’s close at 2.65%. It was 2.60% a year ago.

The Federal Reserve released its minutes from last months policy meeting on Wednesday. They increased the draw down of the mortgage and bond buying program by lowering purchases another $15 billion this month and issued a statement that the program would end October 31, 2014. They also were divided on how long to keep short term rates near zero percent. They all felt that the US economy was beginning to grow at an accelerated  rate, but they were divided on the risk of inflation. About half of them felt that short term rates needed to rise by years end to lower the risk of inflation, while the other half felt that inflation was under control and short term rates did not need to be risen until mid 2015. They did issue caution that rising oil rates due to increased tensions in Iraq, and the Middle East, along with the Russia and Crimea situation could rise to a level that could impact the economy. This could cause them to delay rising short term rates. They also spoke about better than expected jobs reports lately and that they expect to see the second quarter GDP numbers much better than the surprisingly poor numbers from the first quarter.

The Dow closed at 16,943.81. It was down -0.73% from last week’s close of 17,068.26 . The Nasdaq had another strong week, closing at 4415.49 up 0.17% from last week’s close of 4408.18. The S&P 500 closed at 1,967.51, up 0.37% from last week’s 1,960.23. 

After the DOW closed over 17,000 for the first time ever last week,  it dropped this week after a wide sell off on fears that slowing in Europe, and Asia as well as a potential bank collapse in Portugal could cause slowing here in the US.  US stocks have been risen to record numbers recently and there are also fears that profits which are due out may not meet the lofty expectations built into these high stock prices.  The numbers have been doing so well that it is believed the economy has made a recovery from the harsh Winter of Q1. Although there has been improvement in the jobs market and economy, it doesn’t seem to have directly impacted consumer spending which is a big factor in corporate profits. 

Experts predict  that S&P 500 companies results when released are expected to grow in Q2. . Tech shares took a hit, Facebook and Netflix both dropped over 3%, and Tripadvisor fell 5.5%. Shares traded reached 6.18 billion in the US which is a big jump from the May average of 5.79 billion active shares traded.

The Bloomberg Consumer Comfort Index rose to 37.6 in the week that ended on Sunday. It was  the third-strongest reading since the start of 2008, up from 36.4 in the previous period.

All in all things are looking very positive for us. As I have reported for the past few weeks, we are seeing prices flattening out, so if your listing is not selling it is time to pay more attention to pricing. We are no longer seeing every sale being the highest sale. Many homes are sitting or selling below the highest comp. These homes are still higher than sales a year ago, but many are lower than the very highest sales just 45 days ago. We are also seeing all cash investors pulling back which is creating more opportunity for owner occupied purchasers that are using financing to purchase. These buyers were losing out to cash purchasers a couple of months ago, but are having more success now. 

Have a great weekend! 

Economic Update June 28, 2014

Update for the week ending June 28, 2014

Interest rates dropped slightly this week following a disappointing 1st quarter GDP Report. Q1 experienced a record size shrink in economy. The government had predicted a -1% decline, but the real number ended up being -2.9%. This is the largest shrink in the economy since the recession in the Q1 of 2009, when the economy shrunk by 5.4%. The blame of this economic shrink is being put on an unforgiving winter season that shut down factories, caused major disruptions in shipping, and kept American’s away from malls and car dealerships. Housing construction also slumped. Most analysts believe the economy will bounce back and expand at a healthy annual rate of about 3% during the second half of this year.

The Freddie Mac Weekly Primary Mortgage Market Survey showed that the 30-year-fixed rate fell slightly, coming in at 4.14% down from 4.17%  last week. The 15-year-fixed also dropped, down to 3.22% from last week’s 3.30%. A year ago the 30-year fixed was at 4.46% and the 15-year was at 3.50%. Mortgages for loans over $417,000 are more like 4.25% for 30 year and 3.375% for 15 year terms.

The  10-year Treasury note yield rate ended the week at 2.54% after ending last week at 2.63%. It was 2.49% a year ago. 

The Dow closed at 16,851.84 down -0.56% from last week’s close of 16,947.08 The Nasdaq had another strong week, closing at 4,397.93  up 0.68% from last week’s close of 4,368.04. The S&P 500 closed at 1,960.96, down -0.10% from last week’s 1,962.87. 

The unemployment rate in Los Angeles County fell to 8.2% in May from 8.3% in April. it was 10% one year ago. A total of 2,400 net new jobs were added in the county. Countywide around 11,000 more people entered the workface in May and 15,000 reported finding jobs. The state unemployment rate dropped to 7.6% from 7.8%.

The Conference Board's consumer confidence index rose to 85.2 from 83.5 in May, the highest reading since January 2008. Economists surveyed by Bloomberg expected a reading of 83.5. Consumers are optimistic about current conditions. The number of those who stated business conditions are good rose to 23% from 21.1% while those saying conditions are bad fell to 22.8% from 24.6%. More consumers also believe jobs are becoming easier to get. The Thomson Reuters/University of Michigan survey’s consumer sentiment index for June was also up, rising to 82.5 from 81.9 in May. 

Fannie Mae’s monthly economic outlook predicts that home sales will likely fall this year for the first time in four years. Existing home sales fell for the first quarter of the year but were up in both April and May. However for the first four months of the year existing home sales were down -7% year over year and new home sales were down -3%. Fannie Mae is predicting that total home sales in 2014 will be down -1.4% with new home sales up 11.3% and existing home sales down -2.4%. They are predicting mortgage rates will rise only slightly to around 4.3% for a 30-year fixed-rate mortgage.

The  National Association of Realtors® reported that all four regions of the country experienced sales gains compared to a month earlier. Total existing home sales rose 4.9% to a seasonally adjusted rate of 4.89 million in May, up from 4.66 million in April but still -5% below the 5.15 million reported in May 2013. The 4.9% monthly gain was the highest seen since August 2011.Total housing inventory is also on the rise, up 2.2% to 2.28 million, a 5.6 month supply which is 6% higher than a year ago when 2.15 million existing homes were available.

The median existing home price was $213,400, which is 5.1%  above May 2013. Distressed homes accounted for 11% of May sales, down from 18%  in May 2013. The median time on market for all homes was 47 days in May, down from 48 days in April; it was 41 days on market in May 2013. Existing-home sales in the West rose 0.9% to an annual rate of 1.09 million in May, and are -11.4% below a year ago. The median price in the West was $297,500, which is 8.4% above May 2013.

 According to the U.S. Census Bureau and the Department of Housing and Urban Development sales of new single-family houses in May 2014 were at a seasonally adjusted annual rate of 504,000. This is 18.6% above the revised April rate of 425,000 and is 16.9% above the May 2013 estimate of 431,000. The median sales price of new houses sold in May 2014 was $282,000. The seasonally adjusted estimate of new houses for sale at the end of May was 189,000. This represents a supply of 4.5 months at the current sales rate

The California Association of Realtors® reported that the share of equity sales – or non-distressed property sales – rose in May to 89.2% up from 88.4% in April and from 78% in May 2103. May is the 11th straight month that equity sales have been more than 80% of total sales.

California pending home sales fell in May, with the Pending Home Sales Index (PHSI)* dropping -3.4%  from a revised 114.1 in April to 110.1 in May, based on signed contracts and down -10.6%  from the revised 123.2 index recorded in May 2013.  The year-over-year decline in the PHSI was the first double-digit decline in three months.   In Los Angeles County, distressed sales made up 11% of all sales, down from 12% in April and from 23% in May 2013.

The S&P/Case-Shiller Home 20-City Composite Index for April saw a gain of 10.8% year over year and 0.2% from the previous month. Both of these numbers were below what was predicted. Los Angeles saw prices rise 14% year over year and 0.7% from March.

We are now seeing some flattening of prices across the region. While prices are substantially higher than they were a year ago we are seeing homes priced at or below the very highest sales beginning to sit. It is time to pay more attention to pricing! We have seen virtually every sale be a record price for a couple of years. At least for now that appears to be ending! This will be a relief to buyers. Get in contact with the buyers that lost out on so many homes due to multiple offers. Some have given up. Now it may be their time!

Economic Update June 28, 2014

Update for the week ending June 28, 2014

Interest rates dropped slightly this week following a disappointing 1st quarter GDP Report. Q1 experienced a record size shrink in economy. The government had predicted a -1% decline, but the real number ended up being -2.9%. This is the largest shrink in the economy since the recession in the Q1 of 2009, when the economy shrunk by 5.4%. The blame of this economic shrink is being put on an unforgiving winter season that shut down factories, caused major disruptions in shipping, and kept American’s away from malls and car dealerships. Housing construction also slumped. Most analysts believe the economy will bounce back and expand at a healthy annual rate of about 3% during the second half of this year.

The Freddie Mac Weekly Primary Mortgage Market Survey showed that the 30-year-fixed rate fell slightly, coming in at 4.14% down from 4.17%  last week. The 15-year-fixed also dropped, down to 3.22% from last week’s 3.30%. A year ago the 30-year fixed was at 4.46% and the 15-year was at 3.50%. Mortgages for loans over $417,000 are more like 4.25% for 30 year and 3.375% for 15 year terms.

The  10-year Treasury note yield rate ended the week at 2.54% after ending last week at 2.63%. It was 2.49% a year ago. 

The Dow closed at 16,851.84 down -0.56% from last week’s close of 16,947.08 The Nasdaq had another strong week, closing at 4,397.93  up 0.68% from last week’s close of 4,368.04. The S&P 500 closed at 1,960.96, down -0.10% from last week’s 1,962.87. 

The unemployment rate in Los Angeles County fell to 8.2% in May from 8.3% in April. it was 10% one year ago. A total of 2,400 net new jobs were added in the county. Countywide around 11,000 more people entered the workface in May and 15,000 reported finding jobs. The state unemployment rate dropped to 7.6% from 7.8%.

The Conference Board's consumer confidence index rose to 85.2 from 83.5 in May, the highest reading since January 2008. Economists surveyed by Bloomberg expected a reading of 83.5. Consumers are optimistic about current conditions. The number of those who stated business conditions are good rose to 23% from 21.1% while those saying conditions are bad fell to 22.8% from 24.6%. More consumers also believe jobs are becoming easier to get. The Thomson Reuters/University of Michigan survey’s consumer sentiment index for June was also up, rising to 82.5 from 81.9 in May. 

Fannie Mae’s monthly economic outlook predicts that home sales will likely fall this year for the first time in four years. Existing home sales fell for the first quarter of the year but were up in both April and May. However for the first four months of the year existing home sales were down -7% year over year and new home sales were down -3%. Fannie Mae is predicting that total home sales in 2014 will be down -1.4% with new home sales up 11.3% and existing home sales down -2.4%. They are predicting mortgage rates will rise only slightly to around 4.3% for a 30-year fixed-rate mortgage.

The  National Association of Realtors® reported that all four regions of the country experienced sales gains compared to a month earlier. Total existing home sales rose 4.9% to a seasonally adjusted rate of 4.89 million in May, up from 4.66 million in April but still -5% below the 5.15 million reported in May 2013. The 4.9% monthly gain was the highest seen since August 2011.Total housing inventory is also on the rise, up 2.2% to 2.28 million, a 5.6 month supply which is 6% higher than a year ago when 2.15 million existing homes were available.

The median existing home price was $213,400, which is 5.1%  above May 2013. Distressed homes accounted for 11% of May sales, down from 18%  in May 2013. The median time on market for all homes was 47 days in May, down from 48 days in April; it was 41 days on market in May 2013. Existing-home sales in the West rose 0.9% to an annual rate of 1.09 million in May, and are -11.4% below a year ago. The median price in the West was $297,500, which is 8.4% above May 2013.

 According to the U.S. Census Bureau and the Department of Housing and Urban Development sales of new single-family houses in May 2014 were at a seasonally adjusted annual rate of 504,000. This is 18.6% above the revised April rate of 425,000 and is 16.9% above the May 2013 estimate of 431,000. The median sales price of new houses sold in May 2014 was $282,000. The seasonally adjusted estimate of new houses for sale at the end of May was 189,000. This represents a supply of 4.5 months at the current sales rate

The California Association of Realtors® reported that the share of equity sales – or non-distressed property sales – rose in May to 89.2% up from 88.4% in April and from 78% in May 2103. May is the 11th straight month that equity sales have been more than 80% of total sales.

California pending home sales fell in May, with the Pending Home Sales Index (PHSI)* dropping -3.4%  from a revised 114.1 in April to 110.1 in May, based on signed contracts and down -10.6%  from the revised 123.2 index recorded in May 2013.  The year-over-year decline in the PHSI was the first double-digit decline in three months.   In Los Angeles County, distressed sales made up 11% of all sales, down from 12% in April and from 23% in May 2013.

The S&P/Case-Shiller Home 20-City Composite Index for April saw a gain of 10.8% year over year and 0.2% from the previous month. Both of these numbers were below what was predicted. Los Angeles saw prices rise 14% year over year and 0.7% from March.

We are now seeing some flattening of prices across the region. While prices are substantially higher than they were a year ago we are seeing homes priced at or below the very highest sales beginning to sit. It is time to pay more attention to pricing! We have seen virtually every sale be a record price for a couple of years. At least for now that appears to be ending! This will be a relief to buyers. Get in contact with the buyers that lost out on so many homes due to multiple offers. Some have given up. Now it may be their time!

Real Estate: Economic Update 5/30/14

Economic update for the week ending May 30, 2014

U.S. consumer confidence rose in May. The Conference Board reported that its index of consumer attitudes rose to 83 in May from 81.7 in April. This was the second highest level seen since 2008. However the University of Michigan's consumer sentiment index fell more than analysts were expecting ending at 81.9 in May from 84.9 in April. Economists had expected 82.8.

The Commerce Department reported that U.S. consumer spending fell in April by a seasonally adjusted -0.1% from March, below the 0.1% growth expected by economists. March’s growth was revised up by 1% from the 0.9% previously reported. Personal income rose 0.3% in April, down from a 0.5% growth rate in March and wage growth slowed to 0.2%. Many are predicting wider economic gains in the second quarter.

The 10 year Treasury bond yield ended the week at 2.48%.  It was 2.54% last Friday, 2.67% at the end of last month, and 2.13% a year ago.

The Freddie Mac Weekly Primary Mortgage Market Survey showed that the 30-year-fixed rate hit another new low for the year, falling to 4.12% from 4.14%  last week. The 15-year-fixed fell to 3.21% from last week’s 3.25%. The 30-year-fixed rate was 4.33% at the end of last month and the 15-year-fixed was at 3.39%. A year ago the 30-year fixed was at3.81% and the 15-year was at 2.98%. Rates on loans over $417,000 are running around 4.5% for 30 year fixed and 3.5% for 15 year terms. These are the lowest rates of the year and the lowest since last May! I really think rates are going up. I would lock in now!!

It was another strong week for the stock market. The Dow closed at 16,717.17 up 0.67% from last week’s close of 16,606.27. It was up 0.82% from last month’s close of 16,580.84. The Nasdaq also had another strong week, closing at 4,242.62 up  1.36% from last week’s close of 4,185.81.  It was up 1.04% from last month’s close of 4,198.99.  The S&P 500 ended the week by closing above the record-setting 1,900 mark for the second week in a row, closing at 1,923.57, up1.21% from last week’s 1,900.53. It was up 2.1% from last month’s close of 1,883.95.

Realtor.com® released its monthly trend report which showed that the national median list price rose to $207,500, 6.5% higher than the previous year and 3.8% higher than the previous month. The median age of inventory was 86 days, 6.2% higher than the year before. The amount of inventory was up 14.2% compared with April 2013 and up 8.6% from March 2014, according to realtor.com® data. For the Los Angeles-Long Beach MSA, the median price was $472,000, up 8.5% from one year ago and up 2.6% from the previous month. The number of listings on the market was 22,652, up 38.2% from one year ago and up 7.5% from the previous month. The median age of inventory was 61 days, up 29.8% from the one year ago and up 3.4% from the previous month. Once again these are national figures. It hardly seems necessary to talk about medium prices in our market. Never the less we are seeing large price gains in our area!

According to the Southland Regional Association of Realtors®, the median price of a home in the San Fernando Valley rose 13% year over year in April to $519,000. This was only a 0.8% increase over March’s median.  Sales rose strongly, up32% from March but down -2.5% from one year ago. The number of properties on the market, rose 43% year over year to 1,599. However this is only a little more than a two-month supply meaning that housing inventory is very, very low.

The National Association of Realtors® saw its seasonally adjusted pending home sales index rise 0.4% to 97.8 last month. The  index is -9.2% below the level it was a year ago. The index in the West declined -2.9% in April to 88.4 and is -15.0% below April 2013.   

The S&P/Case-Shiller Home Price Index for March showed that home prices in 20 U.S. cities increased 12.4% from March 2013. Los Angeles alone saw a year-over-year change of 16.9% and a rise of 1.2% between February and March.  The S&P/Case Shiller report also included quarterly figures showing that prices for all of the U.S. rose 10.3% in the first quarter compared to the same period in 2013 and rose 0.2% over the fourth quarter of 2013.

Redfin released a report showing that sales of the priciest 1% of homes have risen 21.1% so far this year, after a gain of35.7% in 2013. In Los Angeles the 1% starts at $3.65 million and 43.9% of buyers in this market are all cash buyers. The top three most expensive neighborhoods were Beverly Glen ($11,856,000), Holmby Hills ($9,910,000) and Malibu Road ($9,513,000). Westlake Village was the most expensive neighborhood in Ventura with an average of $2,548,000 for a home in the 1%.

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Los Angeles County Economic update March 28, 2014

L.A. County's unemployment rate in February fell to 8.7% (from 8.9% in January) with employers adding 27,700 jobs to their payrolls (they lost 63,000 jobs in January). A year ago the rate was 10.2%. The statewide unemployment rate in February was 8%. Los Angeles and Long Beach both had 9.8% unemployment. Over the past 12 months, employers in L.A. County have added 86,000 jobs to their payrolls, for a growth rate of 2.1%. 

It was a mostly down week in the markets. Friday saw a boost from the news that consumer spending rose in February at the fastest rate in several months, up 0.3% last month on a seasonally adjusted basis. Americans spent more money on health care and utilities but purchases of durable goods fell for the third month in a row. Also personal income rose 0.3% in March and the U.S. savings rate hit a four-month high of 4.3% from 4.2% in January. Inflation-adjusted disposable income was up 0.3%, the biggest advance in five months. The Dow rose this week to 16,323.06 up 0.13% from last week’s close of 16,302.70. The Nasdaq however dropped to 4,155.76 down -2.83% from last week’s close of 4,276.79 led by a plunge in biotech stocks. This was the worst week for the Nasdaq since October 2012. The S&P 500 also fell, ending the week at 1,857.62, down -0.47% from last week’s 1,866.40 close. 

The ongoing effect of the Fed’s remarks last week continued to be felt on interest rates. The Freddie Mac Weekly Primary Mortgage Market Survey showed that the 30-year-fixed rate rose  to 4.40%, the rate was 4.32% last week. The 15-year-fixed rose to 3.42% from last week’s 3.32%.  A year ago the 30-year fixed was at 3.57% and the 15-year was at 2.76%. 

The 10 year treasury bond yield ended the week at 2.71%. It was 2.75% last Friday.

The Commerce Department reported that sales of new U.S. single-family homes fell -3.3% in February to a seasonally adjusted annual rate of 440,000 units which is the lowest level seen since last September. The rate was down -1.1% compared to February 2013. Sales fell -15.9% in the West. January’s sales were also revised downward to a 445,000-unit pace from a 468,000-unit pace. Some of the slowdown continues to be blamed on unusually cold weather but economists are predicting a rush on homes as household formation begins to accelerate again with the improving economy.  Inventory is at a 5.2 month supply, the highest level since December 2010. The median price of a new home was down -1.2% from February 2013.

Consumer confidence rose to its highest level in more than six years. The Conference Board indexrose to 82.3 in March compared to 78.3 the previous month. Consumers expect the economy to continue to strengthen and are showing optimism that both business conditions and the labor market will improve over the next six months.

The composite 20-city S&P/Case-Shiller home price index  was up 13.2% in January from a year earlier with all 20 cities showing year-over-year gains.  Prices in the 20-city index were 0.1% lower than the prior month, but that is mostly due to the cold winter throughout much of the country,  adjusted for seasonal variations, prices were 0.8% higher month-over-month.  For the Los Angeles metro area, prices were up 18.5% year over year and down -0.3% month over month (but up 0.4% once seasonally adjusted).

The National Association of Realtors® reported that its seasonally adjusted pending home sales index was down -0.8% to 93.9., it was down -10.5% from February 2013. A combination of cold weather, higher mortgage rates, and limited inventory have cramped the market but most economists are expecting a spring rebound.

The California Association of  Realtors®  however saw that pending sales were up in February, jumping 14.2% from January but down -12% from last February. The index rose from 84.8 in January to 96.8 in February and was 110.1 in February 2013. Distressed sales continue to be a smaller part of the market. Equity sales were up statewide, increasing to 85% from January’s 84.4%. In Los Angeles, single-family distressed sales were 14% of the market compared to 16% in January and 32% one year ago.

Next week will be a big week for economic news. Perhaps the most telling report that could impact interest rates is the jobs report which will come out at the end of next week. Expect rates to rise on a good report, 180,000 new jobs or more. Expect rates to remain stable at 160,000 or so, and if the report comes in much lower rates could drop! Good news for the economy is bad news for interest rates ( they rise), and bad economic news is good news for rates ( they fall).

Locally we are seeing a spring surge in prices. we are not seeing as many new listings as we would usually see in March, but I would expect many more in the next few months! 

Economic Update 3/23/14

 This week marked the first meeting of the Fed under new Chair Janet Yellen. The Federal Reserve opted to continue the taper of the mortgage and bond-buying program, dropping participation by another $10 billion per month to a rate of $55 billion per month. The Fed Open Market Committee also changed language that stated the U.S. central bank's key policymaking body would begin to consider raising interest rates once the national unemployment rate hit 6.5%. The new change gives the Fed more room in deciding when to raise rates regardless of the unemployment rate. Rate increases are still off in the future but some economists feel that they could move more quickly once they begin. Yellen indicated that the bond-buying program could end this fall with short term interest rates probably being raised about six months later. It would be the first hike since 2006. Yellen’s frank talk was dubbed a mistake by many in the media.

Yellen’s remarks caused ripples in the market early in the week but stocks rose Friday on positive economic data. The Philadelphia Federal Reserve's manufacturing-activity index for March came in higher than expected showing an increase in regional manufacturing. The Dow rose this week to 16,302.70 up 1.48% from last week’s close of 16,065.67. The Nasdaq saw a more modest increase to 4,276.79 up 0.74% from last week’s close of 4,245.40. The S&P 500 ended the week at 1,866.40, up 1.37% from last week’s 1,841.13 close. 

The Freddie Mac Weekly Primary Mortgage Market Survey showed that the 30-year-fixed rate fell to 4.32%, the rate was 4.37% last week. The 15-year-fixed fell to 3.32% from last week’s 3.38%.  A year ago the 30-year fixed was at 3.54% and the 15-year was at 2.72%. Unfortunately,  rates rose later in the week after the Fed's announcement.  The 30 year rate is closer to 4.5% for loans under $417, 000 and about 4.75% for higher loan amounts. The 15 year is about 3.5% for loans up to $417, 000 and 3.75% for higher balance loans. 

The 10 year treasury note yield rate rose to 2.75% after closing at 2.65% last week. It was at 1.95% one year ago.

The National Association of Realtors® reported that February home sales dropped -0.4% to an annual pace of 4.60 million units, the lowest level since July 2012. Sales have declined in six out of the seven last months.  The median existing home price is at $189,000, up 9.1% from February 2013. In the West alone, existing home sales rose 5.9% to a pace of 1.07 million from January but were down -10.1% from a year ago. The median price in the West was $279,400, up from 18% from last year. Total housing inventory was up 6.4% in February to 2.00 million existing homes for sale. This represents a 5.2 month supply and is up from the 4.6 month supply a year ago. Distressed homes were 16% of sales nationwide compared with 25% a year ago. The median time on market for February was 62 days, down from 67 days in January, and 74 days a year ago. A total of 34% of homes sold in February were on the market for less than one month. First-time buyers accounted for 28% of all sales compared to 26% in January and 30% one year ago. All-cash sales were 35% of transactions compared to 33% in January and 32% one year ago.

Data from the California Association of  Realtors®  shows California home sales fell in February, but housing inventory increased as sellers gear up for the spring home-buying season. Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 361,210units in February, which was down-0.7% from revised 363,930 in January and down -13.7% from a revised 418,520 in February 2013.  The statewide median price of an existing, single-family detached home declined -1.6% from January’s median price of $410,990 to $404,250 in February.  February’s price was 21.3% higher than the revised $333,180 recorded in February 2013, marking two full years of consecutive year-over-year price increases and the 20th straight month of double-digit annual increases. Inventory improved with the available supply of single-family homes for sale now up to 4.7 months from January’s 4.3 months. The index was at 3.6 months in February 2013. A normal supply is generally six or seven months. In Los Angeles County, the median sold price was $389,080 in February 2014, down -8.1% from January’s $423,570 but up 15.2%from February’s $337,630. Sales in Los Angeles were down -8.9% on a month-to-month basis, and down -14.4% year over year. The housing inventory in Los Angeles is currently 4.6 months, up from 4.0 in January 2014, and also up from 3.3 months a year ago.  Median time on market in Los Angeles is currently 43.6 days down from 46.6 days in January and up from 36.5 days in February 2013.

The National Association of Home Builders/Well Fargo builder sentiment index rose to 47 in March, up from February’s reading of 46. Readings below 50 indicate more builders view sales conditions as poor rather than good. The overall index had been over 50 from June through January. The measure of builders' expectations for sales over the next six months fell one point to 53, the lowest level since May, however builders' view of current sales conditions for single-family homes rose one point this month to 52.

The Commerce Department reported that housing starts were down -0.2%to a seasonally adjusted annual rate of 907,000 units, following January’s revised -11.2% drop (it was originally reported at -16%). Groundbreaking was down -5.5% in West and also down in the Northeast but up in the South and Midwest. Permits to build homes were up 7.7% in February to a 1.02 million-unit pace. Permits for single-family homes were down -1.8% but multifamily permits were up 24.5%.

The February numbers from the Southland Regional Association of Realtors® show that inventory is on the rise. Inventory increased 37% from a year ago. At the end of February there were 1,419 homes on the market in the San Fernando Valley as compared with 1,033 a year earlier. The inventory rate is currently 3.2 months versus a 1.9 month supply a year ago.  The median home price was $475,000, up 13% from $422,000 a year earlier but down $10,000 from January’s median. Sales in February dropped -16% from a year ago and -8% from January.

The National Housing Trend Report from realtor.com® showed that the nationwide median list price increased 7.6% year over year to$199,000. The media age of inventory also rose 6.5% to 114 days. The Los Angeles-Long Beach MSA was one of the ten markets nationwide with the biggest year-over-year increase in median price. Prices rose 20% to $449,999.

It was a week full of data! Activity is great and its gearing up to be a very active spring!

Have a great week!

Shohreh Kiaei

Rodeo Realty

818 943 8304

email@shohrehkiaei.com

February 21, 2014 Economic Update

Stocks were mixed this holiday-shortened week responding to a mixed bag of news. Inflation reports show inflation remains low. In January, overall prices rose 1.6%  from a year ago. Prices of most commodities rose modestly while the shelter index was up at 2.6%  compared to a year ago because rents are rising. 

The Dow closed out the week at 16,103.30 down -0.32%  from last week’s close of 16,154.39. The Nasdaq was up, ending the week at 4,263.41 up 0.45% from last week’s 4,244.03 close. The S&P 500 was down very slightly, closing the week at 1,838.63, down -0.13% from last week’s 1,838.63 close.

The  10-year Treasury note yield rate was down slightly to 2.73% after ending last week at 2.75%. It was 1.99% a year ago. 

Mortgage Interest rates rose slightly this week. The Freddie Mac Weekly Primary Mortgage Market Survey showed that the 30-year-fixed rate up to 4.33% from 4.28% last week.  The 15-year-fixed inched up to 3.35% from last week’s 3.33%. A year ago the 30-year fixed was at 3.56% and the 15-year was at 2.77% interest rates on loans over $417,000 are around 4.625% for 30 year fixed and 3.625% on 15 year fixed.

Low inventory continues to have a constraining effect on California home sales. The California Association of Realtors® reported that closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 363,640 units in January, marking the third straight month that sales were below the 400,000 level and the sixth straight decline on a year-over-year basis. Sales in January were up 0.3% from a revised 362,430 in December but were down -13.8%  from a revised 421,780 in January 2013. Inventory at the higher end of the market, priced $1 million and higher did increase 11.1% from last year. The statewide median price of an existing, single-family detached home fell -6.2%  from December’s revised median price of $438,090 to $410,990 in January.  January’s price was 22.1% higher than the revised $336,650 recorded in January 2013, marking 23 consecutive months of year-over-year price increases and the 19th straight month of double-digit annual increases. The available supply of existing, single-family detached homes for sale rose in January to 4.3 months, up from December’s Unsold Inventory Index of 3 months. The index was 3.5 months in January 2013.  The median number of days it took to sell a single-family home also increased to 44.3 days in January, up from 40.2 days in December and from a revised 36.7 days in January 2013.

In Los Angeles County alone, the median sold price of existing homes was down -3.7% in January from December’s $439,830 to $423,570 which is up 21.1% from January 2013’s $349,720 median price. Total sales were down- 21.2% month over month and down -13.3% from January 2013.

Data from the National Association of Realtors® showed that existing-home sales fell by -5.1%from December to January to a seasonally adjusted annual rate of 4.62 million the lowest level since July 2012. Home sales were also down -5.1% year over year. The cold weather, low inventory, and rising mortgage rates are cited as potential reasons for the lower numbers. Inventory improved modestly, up 2.2% month over month to 1.9 million homes and up 7.3% from January 2013. The current inventory supply rate is now 4.9 months, up from 4.6 months in December and 4.4 months a year ago. The median existing home price for all housing types nationwide in January was $188,900, up 10.7% from January 2013. The median time on market for all homes was 67 days in January, down from 72 days in December and 31%  of homes sold in January were on the market for less than a month. Existing-home sales in the West dropped -7.3%  to a pace of 1.01 million in January, and are -13.7% below a year ago. The median price for the West was $273,500, up 14.6% from January 2013.

The latest foreclosure data from RealtyTrac shows that one in every 1,058 U.S. homes received a foreclosure filing in January. Foreclosure filings are down -18% from January 2013 but up 8% from December 2013. The rise in foreclosure activity was caused by a surge in starts, properties just entering foreclosure, as well as scheduled foreclosure auctions. The report did show that foreclosure starts in California actually rose 57% from a year ago after 17 consecutive months of annual decreases.

The extreme weather that has hammered much of the country seems to have also impacted homebuilder confidence. The National Association of Home Builders/Wells Fargo Builder Sentiment Index is now 46, down from January’s 56 reading and the lowest level since May. Economists had been predicting a number similar to the one they saw in January. Generally a reading below 50 indicates that more builders see sales conditions as poor rather than good. Builders’ prediction for sales over the next six months also fell by six points to 54.

U.S. housing starts saw their biggest drop in nearly three years last month. The U.S. Census Bureau and the Department of Housing and Urban Development reported that single-housing family starts were down -16% in January to a seasonally-adjusted annual rate of 880,000 units below economists’ predictions of 950,000. This was attributed to the unusually cold weather gripping much of the country and in fact in the hard-hit Midwest, starts were down a record -67.7%.  Groundbreaking for single-family homes, the largest segment of the market, fell 15.9 percent to a 573,000-unit pace in January, the lowest level since August 2012. Permits to build homes were down by -5.4% in January, the largest drop in since June.

The National Housing Trend Report from realtor.com® showed that the median list price for January rose 8.3% compared to last year but only up 0.1% from the previous month. The number of properties for sale was up 3.1% for the year but down -3.3% from the previous month. The median age of inventory was essentially unchanged. For the Los Angeles-Long Beach MSA the median price was $449,000 up 25.1% from a year ago but down -0.20% from the previous month. The amount of total listings was 18,600 up 3.40% from the previous year and up 5.10% from the previous month. The median age of inventory was 74 days, down -5.1% from the previous year and down -1.3% from the previous month.

We are heading into the selling season which will be a welcome relief when it comes to real estate related data. Expect to see the month over month indicators pick up after March! Not only do they pick up at that time every year, we are beginning to see the pick up in the marketplace.  

While inventory levels are still near record lows we are beginning to see many more homes listed in many of our markets. That alone should increase the number of sales as we still see stronger demand than inventory supply which is evident by the high number of multiple offers. Obviously, not all homes are getting multiple offers, there is a limit to how high a home can be priced. Homes that are not well priced are sitting on the market. 

Video: Economic Update, February 2014; Sustained Global Expansion | BNY Mellon

5 Home Improvement Projects to Avoid

Looking to improve your home? This photo can help!

5 Most Expensive Cities in the US

Ever wonder where the most luxurious cities in the US are?

Here's a list of the top five according to kiplinger.com:

1. New York City

Cost of Living: 125.4% above average (Manhattan only)

City Population: 8,244,910

Median Household Income: $51,270

Median Home Value: $514,900

If you can make it here, you can make it anywhere. New York takes the top spot on our list of the most expensive cities, thanks in large part to its famously exorbitant real estate market. Housing costs in Manhattan, New York City’s most expensive borough, are 4.5 times the national average. Even in Brooklyn, they are nearly 3.5 times the norm; in Queens, more than double. The financial pain doesn’t stop there. Steep commercial rents and distribution costs mean groceries run more in New York than just about anywhere else in the U.S. Consider this: A T-bone steak from a Manhattan grocer averages $15.52. In Harlingen, Texas, the cheapest place to live in America, the same steak goes for $8.34.

2. Honolulu, Hawaii

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Cost of Living: 67% above average

City Population: 345,610

Median Household Income: $56,939

Median Home Value: $545,700

Hawaii has many positive attributes -- the beaches, the luaus, the world-class surf -- but the inflated cost of living isn’t one of them. The state’s remoteness means residents pay a premium for just about everything. Utilities in Honolulu run 67.6% above average; groceries, 58.1%; and transportation, 27.8%. More specifically: Gasoline costs 21% more than average, and a dozen eggs command 73% more. Housing expenses in the state capital are 2.5 times what’s typical for the rest of the U.S.

3. San Francisco, CA

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Cost of Living: 63.4% above average

City Population: 812,826

Median Household Income: $72,947

Median Home Value: $767,300

Living expenses in San Francisco can be as steep as the city’s famed hills. Housing costs, at nearly three times the national average, are the main culprit. The median value of a home in San Francisco is by far the highest on our list of expensive cities, beating out runner-up San Jose by a whopping $161,900. A typical apartment rents for $2,630 a month, triple the national average. One of the few bargains to be had in San Francisco: wine, which sells for 18% below the national average. Napa is just an hour north of the city.

4. San Jose, CA

Cost of Living: 53.4% above average

City Population: 967,487

Median Household Income: $80,764

Median Home Value: $605,400

What makes this city in the heart of Silicon Valley so expensive? Everything. Groceries and utilities exceed the national average by more than 20%, and health care expenses are nearly 20% above the norm. But as in most super-pricey cities, real estate is the real killer. Housing costs, at more than 2.5 times the national average, top everywhere else except New York and San Francisco. San Jose has the highest median household income on this list, which helps residents keep up with the big bills.

5. Stamford, Conn.

Cost of Living: 46.1% above average

City Population: 123,868

Median Household Income: $78,201

Median Home Value: $571,400

There’s good reason Stamford has the second-highest concentration of millionaire households in the country. Housing costs are double the national average, and other living expenses run anywhere from 17% to 32% above average. But the median household income is second-highest on our list, and the easy commute into New York makes the Connecticut city a much more affordable alternative to the Big Apple. Because while housing is indeed expensive, it still runs less than half what it costs to live in Manhattan.

Any questions? Leave a comment or email email@shohrehkiaei.com

What is MLS search?

You may have noticed the MLS search  section of our site. 

MLS (Multiple Listing Service) is the best way to search for the perfect new abode for YOU. One can specify the number of bedrooms, baths, square footage, lot-size, area etc. in order to search a database of all homes currently on the market. You can also request for Shohreh to have specific home types emailed to you. Call her at 8189438304.

To check out MLS search for yourself, click here. 

Home Selling in LA 101

Check out this video for 9 tips you can use to sell your home with Shohreh Kiaei. 

For more tips, you can contact Shohreh herself @ 8189438304.

Tips for buying a house - ShohrehKiaei.com

The top 10 things you need to know when buying a home.-From money.cnn.com

1. Don't buy if you can't stay put.

If you can't commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner - even in a rising market. When prices are falling, it's an even worse proposition.

2. Start by shoring up your credit.

Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.

3. Aim for a home you can really afford.

The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you'll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.

4. If you can't put down the usual 20 percent, you may still qualify for a loan.

There are a variety of public and private lenders who, if you qualify, offer low-interest mortgages that require a small down payment.

5. Buy in a district with good schools.

In most areas, this advice applies even if you don't have school-age children. Reason: When it comes time to sell, you'll learn that strong school districts are a top priority for many home buyers, thus helping to boost property values.

6. Get professional help.

Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process.

7. Choose carefully between points and rate.

When picking a mortgage, you usually have the option of paying additional points -- a portion of the interest that you pay at closing -- in exchange for a lower interest rate. If you stay in the house for a long time -- say three to five years or more -- it's usually a better deal to take the points. The lower interest rate will save you more in the long run.

8. Before house hunting, get pre-approved.

Getting pre-approved will you save yourself the grief of looking at houses you can't afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.

9. Do your homework before bidding.

Your opening bid should be based on the sales trend of similar homes in the neighborhood. So before making it, consider sales of similar homes in the last three months. If homes have recently sold at 5 percent less than the asking price, you should make a bid that's about eight to 10 percent lower than what the seller is asking.

10. Hire a home inspector.

Sure, your lender will require a home appraisal anyway. But that's just the bank's way of determining whether the house is worth the price you've agreed to pay. Separately, you should hire your own home inspector, preferably an engineer with experience in doing home surveys in the area where you are buying. His or her job will be to point out potential problems that could require costly repairs down the road.

See more at  http://money.cnn.com/magazines/moneymag/money101/lesson8/index.htm