Monday, February 28, 2011

Survey: Economy to grow moderately through 2012

NEW YORK (AP) – Feb. 28, 2011 – Industry economists say the U.S. economy will continue to expand at a moderate pace through next year, boosted by a rise in consumer and, especially, business spending – but joblessness is expected to remain high and the pace of the housing recovery will be sluggish.

A new survey from the National Association for Business Economics (NABE) found that economists are more optimistic about the pace of the recovery than they were in November.

The 47 economists polled in the survey expect the economy to grow 3.3 percent this year. That’s up from November’s prediction of 2.6 percent growth. It’s also higher than last year’s 2.9 percent growth rate. Pent-up demand from consumers ready to spend again, as well as strong growth in Asia, are contributing to the faster pace of growth, as is business spending on new equipment and software.

“Panelists do remain confident about the expansion’s durability, but are concerned about high levels of government deficits and debt, excessive unemployment, and rising commodity prices,” said Richard Wobbekind, associate dean of the Leeds School of Business at the University of Colorado and the president of NABE, in a statement.

For 2012, the panel expects the economy to grow 3.4 percent when compared with 2011. This is “consistent with the moderate pace of growth” that usually takes place during recoveries from severe financial crises such as the meltdown that led to the Great Recession, the report said.

Nearly 40 percent of the survey’s respondents think that the economy will continue to grow moderately, while one third were more optimistic. Only 11 percent – or about five of the respondents – described the growth as “subpar with severe wealth losses and onerous debt burdens inhibiting spending and lending.” That’s down sharply from the 40 percent who thought this in November.

The labor market is improving slowly, with the number of jobs employers add to their payrolls expected to average 178,300 this year, but rising throughout the year. The economists predict that 210,000 jobs will be added to payrolls in each of the last three months of 2011.

At the same time, unemployment will stay high, with the rate averaging 9.3 percent in the first quarter of this year and inching slightly lower to 9 percent in the fourth. By the last quarter of 2012, the joblessness rate will still be high – 8.2 percent.

The outlook for consumer spending has improved, and is now expected to grow 3.2 percent this year. That’s up from a 2.4 percent growth forecast in November. In 2012, spending is expected to rise by 2.9 percent, which is the same as the annual growth rate over the past 20 years.

The NABE panelists see business spending as a bright spot, with double-digit percentage growth in spending on equipment and software in both 2011 and 2012. But spending on structures remains weak, expected to grow just 1.4 percent in 2011. By next year, however, this is expected to grow by 4.8 percent.

The panel raised its outlook for the federal deficit. In 2011, the federal government deficit is now expected to reach $1.4 trillion, up from the earlier forecast of $1.1 trillion. The panelists see the federal debt as “their single greatest concern going forward, even exceeding worries about high unemployment, and far greater than concerns about either inflation or deflation,” the report said.

The housing market is expected to stay tepid, with most panelists expecting home prices to bump along “at a cyclical low,” the survey found.

Thursday, February 24, 2011

Florida’s existing home, condo sales up in January

ORLANDO, Fla. – Feb. 23, 2011 – Florida’s existing home and existing condo sales rose in January, according to the latest housing data released by Florida Realtors®. Existing home sales increased 14 percent last month with a total of 12,151 homes sold statewide compared to 10,702 homes sold in January 2010, according to Florida Realtors. January’s statewide sales of existing condos rose 36 percent compared to the previous year’s sales figure.

Seventeen of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales in January; 16 MSAs had higher condo sales.

“Now is a great time for anyone thinking of buying a home in Florida to make that decision,” said 2011 Florida Realtors® President Patricia Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound and Mariner Sands Country Club in Stuart. “Mortgage rates are historically low, although they are beginning to tick up slightly as the economy shows signs of strengthening. Conditions remain very favorable for buyers, with a range of housing inventory and attractive prices.

“Homebuyers soon will have the opportunity to visit a number of open houses in their preferred locales all in a single weekend, as part of the second annual Florida Open House Weekend, March 26-27, 2011! From the Keys to the Panhandle, Realtors across Florida are participating in this statewide open house event sponsored by Florida Realtors. Consult a local Realtor® about Florida Open House Weekend, and find out more about qualification criteria and opportunities in your local housing market.”

Florida’s median sales price for existing homes last month was $122,200; a year ago, it was $131,000 for a 7 percent decrease. Analysts with the National Association of Realtors (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in December 2010 was $169,300, down 0.2 percent from a year ago, according to NAR. In California, the statewide median resales price was $301,850 in December 2010; in Massachusetts, it was $285,950; in Maryland, it was $240,000; and in New York, it was $225,000.

Friday, February 18, 2011


Report Shows Strong Pending Sales

NAPLES, Fla.-February 18, 2011- 2011 is heating up to be a strong year, according to a report released by the Naples Area Board of REALTORS® (NABOR), which tracks home listings and sales within Collier County (excluding Marco Island).
Overall pending sales increased 36 percent to 1,101 contracts in January 2011 compared to 810 contracts in January 2010.

According to Phil Wood, President of John R. Wood REALTORS®, “The strong number of pending sales in January is due to the renewed level of confidence in the economy, which did not exist last year. Property showings are up significantly in February, as potential buyers are ready to get off the fence and make a purchase.”

Dr. Shelton Weeks, Lucas Professor of Real Estate and Director of the Lucas Institute for Real Estate Development & Finance at Florida Gulf Coast University agrees, “It looks like you are experiencing the wealth effect. Buyers are looking at their portfolios and feel wealthier than last year. They feel more confident which increases the probability that they will buy a home right now

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Thursday, February 10, 2011

Real estate is ‘as affordable as it gets’

NEW YORK – Feb. 10, 2011 – Now is a good time to buy real estate, according to data from Moody’s Analytics. Home affordability has returned to pre-housing bubble levels or even fallen below the average in many U.S. markets.

In fact, housing affordability by the end of September had returned to or fallen below the average reached between 1989-2003 in 47 of the 74 housing markets that Moody Analytics tracked.

In September 2010, the ratio of home prices to annual household income had fallen to 1.6 – below the historical average of 1.9 between 1989 and 2003. The ratio peaked in 2005 at 2.3.

“Based on incomes, this is as affordable as it gets,” says Mark Zandi, chief economist at Moody’s Analytics. “If you can get a loan, these are pretty good times to buy.”

Some of the most undervalued markets include Cleveland, Detroit, Las Vegas, Atlanta, and Phoenix. But those cities also are facing high rates of foreclosures and more borrowers defaulting on their mortgages that could decrease values further in those cities before they start to improve, Zandi says.

In Phoenix, for example, “it’s become cheaper to buy than to rent,” Jon Mirmelli, a real estate investor in Scottsdale, Ariz., who rents out foreclosed homes, told The Wall Street Journal. “But the question is: can you qualify for a loan?”

Source: “Home affordability returns to pre-bubble levels,” The Wall Street Journal Online (Feb. 8, 2011)

Florida's existing condo sales up in 4Q 2010

ORLANDO, Fla. – Feb. 10, 2011 – Sales of existing condominiums in Florida rose 6 percent in fourth quarter 2010 compared to the same period a year earlier, according to the latest housing statistics from Florida Realtors®. A total of 17,231 existing condos sold statewide in 4Q 2010; during the same period the year before, a total of 16,229 units changed hands.

Thirteen of Florida’s metropolitan statistical areas (MSAs) reported higher existing condo sales in the fourth quarter, according to Florida Realtors. The statewide existing-condo median sales price was $86,400 for the three-month period; in 4Q 2009 it was $105,600 for a decrease of 18 percent. The statewide existing-condo median price in the fourth quarter was nearly 2.9 percent higher than it was in 3Q 2010.

Looking at Florida’s housing sector in the fourth quarter, Dr. Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness, pointed out that the jobs outlook has a major impact. “Persistently high unemployment constrains demand and feeds into the ongoing foreclosure problem,” Snaith said. “Given the state of the labor market, a continuing decline of home and condo prices in the fourth quarter is not surprising or unexpected. However, it’s important to note the rate of price decline is decelerating.

“As the labor market recovery takes hold in 2011, it will help put a floor beneath price declines and ultimately will provide the basis of housing’s recovery.”

Meanwhile, in the year-to-year quarterly comparison for existing single-family home sales, 39,338 homes sold statewide for the quarter compared to 43,494 homes in 4Q 2009 for a 10 percent decrease. The statewide existing-home median sales price was $134,100 in 4Q 2010; a year earlier, it was $140,500 for a decrease of 5 percent. Sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes, according to the National Association of Realtors® (NAR). The median is a typical market price where half the homes sold for more, half for less.

Optimism has increased slowly but steadily in Florida real estate markets through the fourth quarter of 2010, according to the University of Florida’s Bergstrom Center for Real Estate Studies’ latest quarterly survey of real estate trends. The report surveys economists, industry executives, real estate scholars, researchers and other experts.

Center Director Timothy Becker noted improvement in several key categories, including the outlook for sales in new single-family homes and condominiums, office occupancy, retail occupancy, land investment and capital availability. Respondents’ expectations for occupancy and rent increased across every property type, while the investment outlook rose in a majority of the property types. The statewide outlook was the highest since the survey’s inception in 2006, he said.

“Overall, the market appears to be improving and will continue to improve at a slow pace over the next year,” Becker said.

Low mortgage rates continued to be available during the fourth quarter of the year. According to Freddie Mac, the national commitment rate for a 30-year conventional fixed-rate mortgage averaged 4.41 percent in 4Q 2010; one year earlier, it averaged 4.92 percent.