Real Estate Market – The Government Should Stay Out
San Diego home
What does the weak dollar really mean to an investor? We often read about large, disturbing macro trends, yet rarely think about the micro implications. What does it matter if the budget deficit is $800 billion, or 6.5% of GDP, versus the current estimate of $1.6 trillion, or 13% of GDP? Admittedly, the ramifications over short intervals of time are difficult to discern. This is one of the ways that policymakers sell programs such as stimulus checks or “cash for clunkers.” These programs are all about political posturing and creating the appearance of forging a solution. 
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New Home Sales Increase
new home sales
In my prior post (home sales), I noted that existing home sales for October had increased. Now, for new home sales, just a short time ago, the Commerce Department reported sales of new one-family homes rose to a seasonally adjusted annual rate of 430,000, or by 6.2 percent from September’s revised 405,000 rate. Read more
Home Sales Jump
Home sales far exceeded expectations last month, surging to the highest level in 2.5 years as first-time buyers rushed to take advantage of an expiring ( I said this credit would not expire back on 10-25—Government Subsidized Real Estate) tax credit. But, the credit was extended ( Government Home Buyers Credit Extended & Expanded) until April 2010.
To see what the ‘real’ cost of this program has been, view : Cash For Homes Cost Govt. $43k per Home!
Will the $8,000 credit really turn out to be a good deal if it just pulling sales from future months that would have occured anyway? Plus, there is a good probility that home values in many already hard-hit areas could drop double digits in 2010. So, a 10% price decline on a $500k home would be $50k, or a net loss after the $8k credit of $42k! Just food for thought.
Poway California homes for sale
New Foreclosed Home Law
California foreclosure law
The Escrow Institute of California announced that on 10-23-09 Governor Schwarzenegger signed Assembly Bill 957 into law. This bill, authored by Assembly Member Cathleen Galgiani (D-Tracy), protects consumers by ensuring that they have the right to choose their own real estate service providers when purchasing foreclosed properties.
AB 957, known as the Buyer’s Choice Act, prohibits sellers of so-called REO properties – typically foreclosed properties owned by banks – from requiring the buyer to use a particular title company, escrow settlement or other real estate service provider. This unethical, anti-competitive practice drives up costs for homebuyers and takes business away from locally owned companies. The problem has become particularly acute in the Central Valley and Inland Empire, areas that have faced some of the highest foreclosure rates in the country. Recent data indicate that 11 of the nation’s top 20 foreclosure rates are in California metropolitan areas. Read more
California Unemployment Jumps To 12.5 percent
unemployment rate
The U.S. Bureau of Labor Statistics reported that California unemployment hit 12.5 percent in October to set another modern record. California was one of 29 states reporting unemployment rate increases. Only three states – Michigan, Nevada and Rhode Island – had higher rates than California last month.
The rate is just slightly higher than September, when officials reported a jobless rate of 12.2 percent. It was 8 percent a year ago.
Carlsbad California real estate
New Home Construction Falls 10.6%
new home construction
The Department of Commerce reported that new home construction unexpectedly fell 10.6% in October from the previous month to the lowest level since April. The new home starts for October were 31% below the pace a year ago.
This continues to indicate that the bounce seen in new construction activity that occurred between March and July was not the start of an “organic” V-shaped housing recovery but rather Read more