Naroff Economic Advisors — January New Home Sales

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

INDICATOR: January New Home Sales

KEY DATA: Sales: -0.9%

IN A NUTSHELL: “Rising builder confidence should start showing up in more contracts for new homes being signed as we go through the first half of the year.”

WHAT IT MEANS: Home construction has slowly been on the rise and that trend is likely to continue. While new home sales eased in January, it came after a large upward revision to the December numbers. When I see the data revised upward, it usually means that activity is accelerating through the month and that trend is not picked up in the first calculations.

The National Association of Homebuilders’ confidence index hit its highest level in four years with the sales index surging. That may not have shown up in the sales data yet but it will. Thus, the small drop in new home purchases in January should not be taken as a signal that the sector is faltering again.

What is of concern was the huge differential in demand across the country. Sales jumped sharply in the Northeast and South but fell by double-digits in the Midwest and West. Weather issues in the Midwest may have played a role there while the overhang of distressed homes is likely keeping down new home purchases in the West. Prices are still quite soft and three-quarters of the homes are going for less than $300,000.

The McMansions of the past two decades have become the MiniMansions of this decade. Builders are keeping the supply of new homes on the market tight and the number of homes for sale is lowest in the nearly fifty years the data have been collected. At current selling rates, the inventory is at its lowest level in six years.

MARKETS AND FED POLICY IMPLICATIONS: While sales eased, all the signs are for the new housing segment to continue to recover this year. However, housing in general is being restrained by mortgage and appraisal issues while the new home portion will continue to be buffeted by the acceleration of the foreclosure process.

There were about 7,000 jobs added in the residential construction industry in January and we could be seeing those types of gains continue for a while. We are starting off the year at a sales pace that is well above what was recorded during 2011 so I expect the market to improve and add to growth all year.

Investors may look at the headline number and be a little troubled. But the pace is actually above what most of us had forecasted given the original December sales pace so people should not be disappointed. As good as the economic data may seem, the issue remains energy and the surge in the price due to uncertainty over Iran.

You have to hand it to the Iranians, as long as they can sell their oil, by saber rattling they have managed to get the price up sharply and their revenues are surging. Of course if the bank restrictions sharply curtail their exports, oil prices could rise even further so until the Iranian crisis eases, look for high and rising gasoline prices.

The jump in gasoline prices curtailed the recovery last spring and it is likely to slow things once again. And of course the Greek situation is still a work in progress. It just seems that the only luck the recovery has is bad luck.

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RE/MAX Connection Realtors is not a licensed financial advisor and is not providing any financial advice. You should consult with a licensed financial advisor prior to making any financial decisions. RE/MAX Connection Realtors only is 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 Lincoln Drive East, Suite Two, Marlton, NJ 08053 www.goconnectionnj.com.

RE/MAX CONNECTION: NUMBER ONE IN NEW JERSEY

RE/MAX CONNECTION RANKED NUMBER ONE
IN TOTAL UNITS BOUGHT, SOLD IN NEW JERSEY

Contact: Kevin Bayzath
Phone: (856) 988-1800
Email: kbayzath@aol.com

MARLTON (Feb. 15) – RE/MAX Connection Realtors was the number one-ranked RE/MAX real estate company in New Jersey in 2011 and had three of the top four ranked individual agents in the state.

The three RE/MAX Connection offices – in Marlton, Mantua and Turnersville – successfully closed 1,417 transactions, more than any other multi-office operation in the state, as well as closing more than $218 million dollars in real estate transactions. The company also ranked third statewide in overall agent commissions.

RE/MAX Connection agent Mark Petracci, from the Mantua office, was – for the third-straight year — the state’s number one RE/MAX agent. Joining him at the top of the list were Turnersville colleagues David Beach at number three in the state and Joseph Granato at number four.

Among individual office locations, RE/MAX Connection’s Turnersville operation was second in the state in 2011 with the Marlton office being ranked number five.

“We have always said the best agents in the state work at RE/MAX Connection, the best real estate agency in the state,” said Christopher J. Brown, CEO of RE/MAX Connection. “This year’s rankings, once again, prove that point.

“Our goal is to produce the best results every day for our clients as we help them buy or sell property,” Brown continued, “and we are very proud of this recognition of our collective hard work.”

Three other agents from the RE/MAX Connection Turnersville office also received high honors in the 2011 rankings. John Swartz, at number six, and Christopher McKenty, at number seven, finished in the top 10 in the Team Sales category for the year. In addition, Peter Sklikas received the “First Year Performance Award” as the agent who posted the best sales numbers among those joining RE/MAX midyear.

“While other companies in this economy are having a hard time closing deals, RE/MAX Connection agents have adapted and overcome these challenges,” Brown explained. “Among the new techniques our agents are implementing to do this is our Home Price Protection program.”

Home Price Protection is a financial product that provides a payout to homeowners in the event the relative value of their home declines at the time they sell, regardless of what price the home sells for. It is available exclusively in South Jersey by RE/MAX Connection.

Among other individual honors, a total of 36 agents from the three offices achieved three different sales levels of accomplishment. The highest ranking, Platinum Club status, was reached by three agents from the Turnersville office: Joseph Granato, Christopher McKenty and Peter Sklikas.

Among the 16 RE/MAX Connection agents who achieved 100% Club status:
— Eight were from the Marlton office: Mark Cuccuini, Ines De La Cruz, Ron DiPinto, Bryant Lafferty, Brian Menchel, Yvette Veideman, Rochelle Yanchyshyn and Gina Ziegler.
— Four were from the Mantua office: Brent Grigsby, Scott Kompa, Mark Petracci and Dave Sulvetta.
— Four were from the Turnersville office: David Beach, John Swartz, Michael Walton and Frank Wible.

In addition, 17 RE/MAX Connection agents reached Executive Club status:
— Six from Marlton: Joan Baines, Donna Clyde, Joanne Kim, Dawn McCann, Robert Millaway and Elisa Nicolaci.
— Eight from Mantua: Richard Bradford, Donna Breland, Daniel D’Alonzo Jr., Janet Larsen, James Moller, Jennifer Pagliarini, Antoinette Wessel and Brian Ziegenfuss.
— Three from Turnersville: Colleen Dorrego, Danielle McFadden and Heidi Rommel.

“We are especially proud that, despite there being more people and more homes in other portions of the state,” said Kevin Bayzath, Broker of Record for RE/MAX Connection, “our three South Jersey offices, and our outstanding agents, closed more transactions than the competition.”

RE/MAX Connection – Marlton is located at 1000 Lincoln Drive East, Suite Two, Marlton, NJ 08053. Phone: (856) 988-1800. Fax: (856) 988-8020. RE/MAX Connection – Mantua is located at 140 Bridgeton Pike, Mantua, NJ 08051. Phone: (856) 415-1210. Fax: (856) 415-1291. RE/MAX Connection – Turnersville is at 5701 Route 42, Turnersville, NJ 08012. Phone: 856-228-7990. Fax: 856-228-4433.

All three offices are on the web at www.goconnectionnj.com.

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RE/MAX Connection Realtors 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, unless that information is subsequently confirmed in writing. RE/MAX Connection Realtors is providing this transmission for informational purposes only. Any views or opinions presented in this email/blog do not necessarily represent those of the company.

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 Lincoln Drive East, Suite Two, Marlton, NJ 08053 www.goconnectionnj.com.

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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

October New Home Sales

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

INDICATOR: October New Home Sales
KEY DATA: Sales: +1.3%; Median Prices (Sept-Oct): -0.5%; Prices (Oct ’10-Oct ’11)): +4.0%

IN A NUTSHELL: “The new home market remains in the doldrums.”

WHAT IT MEANS: Yes, new home sales rose in October but that is about all you can say about this report. First, the level of demand is miniscule. Think about it, only 25,000 newly constructed houses are being are being purchased each month. Second, the September sales rate was revised downward, not a trend you like to see. At least there were a couple areas around the country, the Midwest and West, where builders did see a strong pick-up in sales. But the Northeast was flat and there was a sharp decline in the South. Total sales for the first ten months of the year are down nearly 7% compared to 2010 levels. As for prices, they eased a touch over the month but were up quite nicely when compared a year ago. Builders are competing with distressed houses so they have to keep prices quite low. Builders continue to do a good job of controlling inventories so demand and supply are being kept relatively in balance.

MARKETS AND FED POLICY IMPLICATIONS: Housing has been adding a little to growth this year and that is likely to continue. But the operative word in that sentence is “little”. The huge bump in jobs, income and GDP that we usually get from a rebounding housing market is not likely to be seen for quite a long time so don’t expect overall growth to be great over the next year. Still, there really is no place to go but up so we can also count on housing to be a positive not a negative in the overall scheme of things. As for the markets, the story is the consumer and the apparently robust increase in sales during the “Black Friday” weekend. With today being “Cyber Monday”, it will be interesting to see how demand holds up. With discounts really high, earnings may not be spectacular but when it comes to the economy, it is all about the number of goods bought, not the dollar value so if people spent more on discounted products, that means consumption should be up sharply. This week we get the employment report so after the euphoria of open-wallets eases, we will get back to the most important economic indicator, jobs. The November payroll gains should be a lot better than the initially reported 80,000 rise in October. There could be a decline in the unemployment rate and an ‘8’ handle would be nice to see again.
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