Weekly Housing Market Update

QUOTE OF THE WEEK… “Opportunities multiply as they are seized.”–Sun Tzu, ancient Chinese military general, thought to be the author of The Art of War

INFO THAT HITS US WHERE WE LIVE… Investors are seizing the opportunity to invest in Home Depot, the home improvement retailer who’s seizing the opportunities presented by this still young housing recovery. Home Depot just posted adjusted Q3 earnings of 74 cents a share, up 23% from a year ago, evidence there’s a growing number of homeowners sinking money into their properties. Other facts back this up. The U.S. homeowner vacancy rate fell to 1.9% in Q3, a seven-year low. Many feel this signals that the economy has worked off most of the excess housing that had been built. 

This better balance in the housing market is boosting home prices and builder confidence. Housing starts are up, as well as construction jobs, following a four-year slump. No wonder investors are bidding up stocks throughout the home improvement sector, including Masco, Whirlpool, Sherwin-Williams, and Home Depot’s competitor Lowe’s. Finally, Realtor.com reports October inventory at 1.76 million units, down 17% from a year ago and 40% below the September 2007 peak. In uncertain times, there’s no place like home.

BUSINESS TIP OF THE WEEK… When you truly believe in your idea, your company, or yourself, then you don’t need to “sell.” You just need to communicate.

>> Review of Last Week

DOWN TIME… Stocks headed down again, the Dow posting its fourth consecutive week of negative performance. Observers think investors are turning this down time in the markets into professional downtime, taking their money off the table as they wait for Washington to come to grips with the so-called fiscal cliff. These are the mandatory tax hikes and spending cuts that kick in January 1 unless politicians reach a deal to cut the 1.3 trillion dollar deficit some other way. The only “up” feeling came from a better than expected New York Empire Manufacturing number and the installation of new Chinese leadership, who should spike their economic growth.

The rest of the economic data disappointed. On the manufacturing front, both the Philadelphia Fed index and October Industrial Production were off the mark and there was a large hike in both initial and continuing unemployment claims. October PPI producer prices were down a little and CPI consumer prices were up only 0.1%, so inflation appears to be under control. But October Retail Sales were down 0.3%. Many felt it was just superstorm Sandy temporarily impacting all the numbers. 

For the week, the Dow ended down 1.8%, to 12588; the S&P 500 was down 1.4%, to1360; and the Nasdaq was down 1.8%, to 2853. 

With the damage to stocks, traders expected big advances in bonds. But treasuries ended the week with only small gains and trade overall was flat. The FNMA 3.5% bond we watch ended the week off .05, at $106.17. As Washington heads toward the fiscal cliff, investors see a safe haven in mortgage bonds, pushing rates down. National average rates for 30-year fixed rate mortgages hit a new low in Freddie Mac records dating to 1971.The Mortgage Bankers Association reported purchase loan applications UP 11% for the week and UP 22% over a year ago. 

DID YOU KNOW?… Sarah Josepha Hale, a magazine editor, persuaded Abraham Lincoln to declare Thanksgiving a national holiday in 1863. She also wrote the nursery rhyme “Mary Had a Little Lamb.”

>> This Week’s Forecast

EXISTING HOMES, HOUSING STARTS, ECONOMIC INDICATORS, TURKEY!… It’s a short week of economic reports, just three days of data. Monday’s Existing Home Sales for October are forecast to be off a little, just like Tuesday’s Housing Starts and Building Permits for October. Wednesday’s Leading Economic Indicators (LEI) index and Michigan Consumer Sentiment are also expected to be down a bit.

The stock market is closed Thursday for the holiday and will close early at 1 p.m. on Friday. Happy Thanksgiving to you and yours!

 

About Jeff Hansen, Realtor in Colorado

Search for homes here; www.jeffhansen.remax.com for FREE. Licensed Real Estate broker with RE/MAX Professionals at 10135 W. San Juan Way, Littleton, Colorado 80127. I have been a Realtor Since 1992 and provide Free Real Estate Advice Realtor in Littleton, Colorado and the Metro Denver Area, A Real Estate investment company focusing on the buyers and sellers of homes, also including fix and flips and rental properties, Listings and all sales of realty. (303)794-4530 Disclaimer I will not receive any compensation or take on any liability because of any conversation on this or any related web page w/o any written brokerage agreement. And there will be no relationship actual or implied because of any conversation on this or similar pages. No written agreement, therefore. AND Differ from state to state, so check your state's rules.
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