November New Home Sales

NAROFF ECONOMIC ADVISORS, Inc.
Joel L. Naroff
President and Chief Economist

INDICATOR: November New Home Sales
KEY DATA: Sales: 315,000 (up 1.6%); Nov ’10-Nov ‘11: +9.8%

IN A NUTSHELL: “The choices may be limited but the sale of new homes is moving up anyway.”

WHAT IT MEANS: After falling apart in the summer of our discontented Congress, new home sales have been on a steady upward climb. The November pace was just about at its highest level this year. The October number was revised upward and if that happens with November, we could see the rate break that high. Still, the level is ridiculously low and is about one-quarter the pace hit at the peak of the boom. The current sales pace needs to more than double before we can say that demand is decent. With so many distressed homes on the market, developers are “building down”, constructing smaller homes so the price continues to fall. At the same time, though, the supply is being kept under control. Indeed, the number of homes for sale hit the lowest level in the forty nine year history of the data.

MARKETS AND FED POLICY IMPLICATIONS: The recovery in the housing market is under way but it is also glacial. There is not much hope for the new construction segment of the market as long as the overhang of distressed homes remains so high. Still, up is better than down and the remaining builders are probably seeing better sales, at least compared to last year. In any event, it’s time to do some food shopping for the weekend so let me say to all:
Happy Holidays
RE/MAX Connection Realtors disclaimer:
RE/MAX Connection Realtors are not licensed financial advisors, and are not providing any financial advice, you should consult with a licensed financial advisor prior to making any financial decisions. RE/MAX Connection Realtors are only providing this economic statement from Naroff Economic Advisors, Inc. for informational purposes.
Our company accepts no liability for the content of this email/blog, or for the consequences of any actions taken on the basis of the information provided. Any views or opinions presented in this email/blog are solely those of the author and do not necessarily represent those of the company. Finally, the recipient should check this email and any attachments for the presence of viruses. The company accepts no liability for any damage caused by any virus transmitted by this email.
RE/MAX Connection Realtors, 1000 East Lincoln Drive, Suite 2, Marlton, NJ 08053 www.goconnectionnj.com

November Housing Starts and Permits

NAROFF ECONOMIC ADVISORS, Inc.
Joel L. Naroff
President and Chief Economist

INDICATOR: November Housing Starts and Permits
KEY DATA: Starts: +9.3%; 1-Family: +2.3%; Multi-Family: +25.3; Permits: +5.7%; 1-Family: +1.6%; Multi-Family: +13.9%

IN A NUTSHELL: “The slow process of getting back to normal seems to be underway as home construction is picking up some steam.”

WHAT IT MEANS: A major constraint to better economic strength has been the weak housing market. With so many distress homes on the market it is difficult for builders to compete. That reality still exists and is likely to continue that way for quite some time which means the pathway from disaster to health will be slow. But finally, it appears that the process of healing is underway. Housing starts jumped in November led by a huge increase in multi-family activity. With so many people out of the market and mortgages hard to get, a growing number of households are looking to rent so this segment of the market should remain strong. But there is also a steady upward trend in single-family construction as well. Looking across the nation, there was a huge increase in the Northeast that looks to be a bit overestimated. That could mean some reduction in December. Starts in the West were robust as well, they were up moderately in the South but down sharply in the Midwest. Looking outward, permit requests continue to rise and that means better construction in the months ahead. Builders are not requesting permits unless they intend to use them and the number of units authorized but not started keeps going down. We have begun to see that as the number of units under construction has increased.

MARKETS AND FED POLICY IMPLICATIONS: This was a surprisingly strong report continuing the trend of better than expected numbers. Home construction needs to improve if job growth is to pick up and that seems to be the case. While it may take two more years to return to decent levels of construction, the improvement over the next few years will add moderately to growth. But more importantly, it is estimated that an additional 100,000 starts will add roughly 250,000 new jobs and we are likely to see that increase in 2012. That bodes well for employment growth. Since these tend to be well paid positions, income growth should be bolstered as well. Thus, investors should take heart that if Europe doesn’t melt down and Congress figures out how to extend the payroll tax, the economy can continue to gain momentum. Indeed, if Europe was not such an unknown, the markets would be looking toward next year with some optimism instead the uncertainty now being felt.

RE/MAX Connection Realtors disclaimer:
RE/MAX Connection Realtors are not licensed financial advisors, and are not providing any financial advice, you should consult with a licensed financial advisor prior to making any financial decisions. RE/MAX Connection Realtors are only providing this economic statement from Naroff Economic Advisors, Inc. for informational purposes.
Our company accepts no liability for the content of this email/blog, or for the consequences of any actions taken on the basis of the information provided. Any views or opinions presented in this email/blog are solely those of the author and do not necessarily represent those of the company. Finally, the recipient should check this email and any attachments for the presence of viruses. The company accepts no liability for any damage caused by any virus transmitted by this email.
RE/MAX Connection Realtors, 1000 East Lincoln Drive, Suite 2, Marlton, NJ 08053 www.goconnectionnj.com

A Single Woman’s Guide To Home Ownership

A Single Woman’s Guide To Home Ownership

The traditional view of home ownership usually includes a married couple, but times have changed, and more and more single women are entering the housing market. In fact, almost twice as many single women are purchasing homes than single men, and almost one in five homes purchased today are purchased by single women. So why are single women making up such a large part of the housing market, and what are the special considerations single women should make when purchasing a home?

What Women Want!

The demographics of single women buying homes are quite diverse. From young professional women in their 20s to divorced mothers in their 40s, there are really no typical single women making home purchases, and their needs are just as diverse. Overall, however, there do appear to be a few trends in the market, and here is a list of what the average single woman is looking for in a new home.

Most spend less than $200,000
Prefer two bedrooms or more
Less likely to choose new construction
Will compromise size and cost to get other amenities, but not location
Smaller spaces are acceptable, and many prefer condos
Desire security and safe neighborhoods with a strong community feel
Look for close proximity to stores, shopping, and fitness centers

Things To Consider

If you are a single woman looking to enter the housing market, or know someone who is, then what should be considered before making the leap into home ownership?

Essentially the considerations are much the same as those of any homeowner. Taking a realistic look at your financial situation is always important. Seeking out the advice of a qualified financial advisor and a REALTOR® can make the process less difficult. It is also important to be sure you are not entering into any unwise loan agreements that may not be wise down the road, such as no-money-down deals. It is also important to have a clear picture of what your needs as a homeowner are, and that you don’t settle for something that will not work with your particular lifestyle.

RE/MAX Connection Realtors disclaimer:
RE/MAX Connection Realtors are not licensed financial advisors, and are not providing any financial advice, you should consult with a licensed financial advisor prior to making any financial decisions. RE/MAX Connection Realtors are only providing this economic statement from Naroff Economic Advisors, Inc. for informational purposes.
Our company accepts no liability for the content of this email/blog, or for the consequences of any actions taken on the basis of the information provided. Any views or opinions presented in this email/blog are solely those of the author and do not necessarily represent those of the company. Finally, the recipient should check this email and any attachments for the presence of viruses. The company accepts no liability for any damage caused by any virus transmitted by this email.
RE/MAX Connection Realtors, 1000 East Lincoln Drive, Suite 2, Marlton, NJ 08053 www.goconnectionnj.com

May Housing Starts and Permits

NAROFF ECONOMIC ADVISORS, Inc.
Joel L. Naroff
President and Chief Economist

INDICATOR: May Housing Starts and Permits
KEY DATA: Starts: +3.5%; 1-Family: +3.7%; 5+ Units: +8.9%; Permits: +8.7%; 1-Family: +2.5%; 5+ Units: +29.3%

IN A NUTSHELL: “Builders may not be able to compete with distressed homes but that doesn’t mean they have closed up shop.”

WHAT IT MEANS: New construction is not going to be the driving force it once was in this economy, at least for quite a while. But there still are many people who prefer new homes and construction did improve in May. Maybe even more importantly, with so many households no longer able to get into the housing market, the demand for rental housing is rising. That has led to growing activity in the multi-family segment. The rise in construction was not evenly distributed across the nation as starts surged in the West, rose modestly in the South but eased back in the Northeast and Midwest. Looking forward, home building should pick up soon and possibly quite solidly. Permit requests were up strongly, especially for multi-family dwellings. The slowdown in construction in the Northeast may come to an end with gusto as permit requests rose by over 35% in that part of the country. They were also up solidly in the West and moderately in the South. However, there was a small drop in the Midwest.

MARKETS AND FED POLICY IMPLICATIONS: The importance of residential construction has dropped dramatically, which should surprise no one given how weak housing starts have been. However, GDP growth is all about changes in levels not the strength of those levels and it is very likely that housing will add to growth as we move through the second half of the year. Unfortunately, it looks like it has been a major drag during the spring quarter. The number of homes under construction has pretty much stabilized, which could also point to a bottom in activity. Thus, this report can be classified as a pretty good one despite the continued modest pace of construction. Regardless, I don’t think investors are hanging their hats on what happens in the housing market. We can have a recovery without the residential housing segment contributing greatly but it is just not going to be a robust one.

RE/MAX Connection Realtors disclaimer:
RE/MAX Connection Realtors are not licensed financial advisors, and are not providing any financial advice, you should consult with a licensed financial advisor prior to making any financial decisions. RE/MAX Connection Realtors are only providing this economic statement from Naroff Economic Advisors, Inc. for informational purposes.
Our company accepts no liability for the content of this email/blog, or for the consequences of any actions taken on the basis of the information provided. Any views or opinions presented in this email/blog are solely those of the author and do not necessarily represent those of the company. Finally, the recipient should check this email and any attachments for the presence of viruses. The company accepts no liability for any damage caused by any virus transmitted by this email.
RE/MAX Connection Realtors, 1000 East Lincoln Drive, Suite 2, Marlton, NJ 08053 www.goconnectionnj.com