Second Quarter 2011   The second quarter of 2011 showed a marked decline in transactions compared to the second quarter of 2010, but remember that there was increased activity last year due to the tax credit.   Nearly a third fewer transactions. Closings nearly two weeks slower.   The average selling price dropped two percent. Sellers accepted 13% less than they had originally asked.   If you'd like the selling details of the home that closed in your neighborhood, send me an email. I'll be happy to send them to you.   07/10/2011

 Closed Transactions Month of June   Please note: we are comparing closings for June of this year to last year.   26% fewer homes closed in June this year.   Transactions took about 10 days longer to close.  The average selling price was down nine percent.     Sellers accepted 12% less than they originally asked. There are 249 homes in inventory, 20 more than last month, at all price ranges (the highest listing is $8.8M).  Average listing  price is $949,000, down from last month) , with half the inventory under $679,000.     Factoring out homes listed at over $1M, the average home in Bainbridge is listed at $541,000, with half the homes under $479,000.     In summary, Bainbridge has more homes in inventory with prices lower than last month. Still a strong buyer's market. If you would l... 07/05/2011

07/05/2011

It will be interesting to see if Wednesday's Pending Home Sales give us some positive signs about the state of housing sales a few months out. The expectation is for a small gain. The week begins with the Fed's favorite inflation reading, Core PCE Prices, forecast to be up a benign 0.2% for May.We'll all watch for signs of improvement in Thursday's Initial Unemployment Claims, but the figure should still be above the 400,000 threshold. Nevertheless, consumers aren't too discouraged, as Tuesday's Consumer Confidence and Friday's University of Michigan Consumer Sentiment index are both expected to hold steady for June. From my weekly enewsletter INSIDE LENDING, for real estate pros, June 27, 2011 06/27/2011

It certainly takes plenty of determination to find the opportunities in today's housing market. Last week the National Association of Realtors (NAR) reported Existing Home Sales down 3.8% in May to an annual rate of 4.81 million units, a six-month low. The median price was up for the month, though down 4.6% from a year ago. Inventories declined, but the months' supply increased to 9.3 because of the slower sales rate. Nevertheless, the NAR's economist opined, "...sales activity in the second half of the year is expected to be stronger than the first half, and will be much stronger than the second half of last year." Thursday's New Home Sales showed a 2.1% drop for May, to a 319,000 annual rate, but this did beat expectations. The months' supply fell to 6.2, as inventories dropped to the... 06/27/2011

Weaker stock prices and stronger concerns over European sovereign debt sent investors to the safe haven of bonds, whose prices benefited.  The FNMA 4.0% bond we watch ended the week up .84, closing at $101.09. In Freddie Mac's weekly survey, national average rates for conforming mortgages held at levels that are near the lowest for the year. From my weekly enewsletter INSIDE LENDING, for real estate pros, June 27, 2011 06/27/2011

It was a volatile week in stocks, with only the Nasdaq index up, while both the Dow and the S&P 500 were off. The up-and-down stock prices mimicked Wall Street's responses to the economic situation. The week started on an up note, as Greek debt problems (which could impact U.S. banks) seemed closer to solution. But on this side of the pond, investors found little solace in Fed Chairman Bernanke's admission that the economic recovery is slower than expected. He thinks food and energy prices will subside, but doesn't have a clear take on why the slow pace of recovery persists. He also said that the majority of home sales "have much more stable prices than houses sold on a distressed basis," as reported here on June 6.  The next day, the International Energy Agency (IEA) announced it will ... 06/27/2011

 In last week's presser, Fed Chairman Bernanke explained that keeping the Funds Rate where it is for an "extended period" means at least two or three meetings. Economists are taking him at his word. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same. Current Fed Funds Rate: 0%-0.25% After FOMC meeting on: Consensus Aug 9 0%-0.25% Sep 20 0%-0.25% Nov 2 0%-0.25% Probability of change from current policy: After FOMC meeting on: Consensus Aug 9      <1% Sep 20      <1% Nov 2      <1% From my weekly enewsletter INSIDE LENDING, for real estate pros, June 27, 2011 06/27/2011

 Date Time (ET) Release For Consensus Prior Impact MJun 27 08:30 Personal Income May 0.3% 0.4% Moderate MJun 27 08:30 Personal Spending May 0.1% 0.4% HIGH MJun 27 08:30 PCE Prices - Core May 0.2% 0.2% HIGH TuJun 28 10:00 Consumer Confidence Jun 60.3 60.8 Moderate WJun 29 10:00 Pending Home Sales May 2.0% -11.6% Moderate WJun 29 10:30 Crude Inventories 6/25 NA -1.711M Moderate ThJun 30 08:30 Initial Unemployment Claims 6/25 420K 429K Moderate ThJun 30 08:30 Continuing Unemployment Claims 6/25 3.715M 3.697M Moderate ThJun 30 09:45 Chicago PMI Jun 53.5 56.6 HIGH FJul 1 09:55 U. of Michigan Consumer Sentiment - Final Jun 71.8 71.8 Moderate FJul 1 10:00 ISM Index Jun 51.1 53.5 HIGH  From my weekly enewsletter INSIDE LENDING, for real estate pros, June 27, 2011 06/27/2011

06/27/2011

What more could you want? Tuesday's Existing Home Sales and Thursday's New Home Sales will show us if May's closings pushed the annual sales rate up or down. Unfortunately, down is forecast, although surprises are always possible. Wednesday we get the Fed's pronouncement on the Funds Rate and the state of the economy. No one expects the rate to budge, since Fed Chairman Bernanke keeps saying it needs to remain at its rock bottom level for an "extended period." But it will be useful to examine the Fed's policy statement for their take on inflation and the pace of the recovery. From my weekly enewsletter for real estate pros, INSIDE LENDING, for the week of June 20, 2011 06/21/2011

What was gaining on us last week were May Housing Starts, up 3.5% for the month to a higher-than-expected 560,000 unit annual rate. The gain included a 29% increase in multi-family starts, which are now up 17.5% over a year ago. New building permits were also up in May, by 8.7%, to a 612,000 annual rate. Permits indicate the level of starts a short time out, so some economists see the beginning of an upward trend. With the number of homes under construction at the lowest levels on record back to 1970, and as inventories continue to come down, home building will certainly need to grow considerably.Experts are now saying we'll need to find homes for 150 million more people, the projected growth of the U.S. population in the next 30 to 40 years. This will spur a ramp up in home building an... 06/21/2011

After six down weeks, the Dow and the S&P 500 stock indexes finally showed weekly gains, although the S&P was up a mere half point. The tech-heavy Nasdaq was still off a tick for the week, dragged down by the makers of BlackBerry, whose stock dropped mightily on earnings that fell well short of Street expectations. Economic reports came in mixed. Inflation continues to be a worry to all but the Fed, as the Consumer Price Index (CPI) for May was up 0.2%. In case you think that's just from higher food and gas prices, the Core CPI, which excludes those, was up 0.3%. We'll see what the Fed says this week.  May Retail Sales were down a less-than-expected 0.2% but are up 7.7% from a year ago. New weekly jobless claims dropped by 16,000 to 414,000, while continuing claims fell by 21,000, to 3.... 06/21/2011

Forecasting Federal Reserve policy changes in coming months... Given Fed Chairman Bernanke's continued pronouncements, economists do not expect a hike in the Funds Rate any time soon. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same. Current Fed Funds Rate: 0%-0.25% After FOMC meeting on: Consensus Jun 22 0%-0.25% Aug 9 0%-0.25% Sep 20 0%-0.25% Probability of change from current policy: After FOMC meeting on: Consensus Jun 22      <1% Aug 9      <1% Sep 20      <1% From my weekly enewsletter for real estate pros, INSIDE LENDING, for the week of June 20, 2011   06/21/2011

Economic Calendar for the Week of June 20 - June 24  Date Time (ET) Release For Consensus Prior Impact TuJun 21 10:00 Existing Home Sales May 4.78M 5.05M Moderate WJun 22 10:30 Crude Inventories 6/18 NA -3.406M Moderate WJun 22 14:15 FOMC Rate Decision 6/22 0%-0.25% 0%-0.25% HIGH ThJun 23 08:30 Initial Unemployment Claims 6/18 418K 414K Moderate ThJun 23 08:30 Continuing Unemployment Claims 6/11 3.680M 3.675M Moderate ThJun 23 10:00 New Home Sales May 305K 323K Moderate FJun 24 08:30 GDP - Third Estimate Q1 1.8% 1.8% Moderate FJun 24 08:30 GDP Deflator - Third Estimate Q1 1.9% 1.9% Moderate FJun 24 08:30 Durable Goods Orders May 1.0% -3.6% Moderate  From my weekly enewsletter for real estate pros, INSIDE LENDING, for the week of June 20, 2011 06/21/2011

Bainbridge Island residential properties were selling for a May median price of $516,000, about 6% lower than in April and 13% higher than a year ago. The more stable three month moving average closed sale price rose 1% from last month to $522,000 and is 2% higher than a year ago. The Kitsap County 3 month moving average median price is about 5% lower than it was a year ago. The 3 month moving average for Bainbridge Island's number of closed sales is about 19% lower than a year ago. The 3 month moving average of closed sales is down 20% Countywide from a year ago. The 3 month moving average number of Bainbridge pending sales in May was down 34% from a year ago. The number of active listings on Bainbridge (233) rose 20% from April and is about 5% higher than a year ago.  The inventory tu... 06/20/2011

06/20/2011

There are those who think the housing market is in bad shape, with the start of a second dip in home prices. Then there are those who see something better -- a bumpy bottoming of home prices, which will soon head back up. Those of us in the second camp were given more ammunition last week by real estate data company Altos Research. Their evidence shows prices bottomed out in March and achieved seasonal rises in April and May. Their VP of market analytics said in a recent webcast: "We're pretty confident that means there is going to be a rebound.... There's still plenty of movement upside and we're going to probably move...back into positive ground." The researchers also reported that median list prices for single-family homes were up from March to May in all but two of the 20 cities the... 06/14/2011

UNDER TWELVE THOUSAND... That's not just a price range for used cars, it's also where the Dow landed last week. Not surprising, as we've now had six down weeks in the stock market, matching the six weeks there's been a negative mood on Wall Street. That mood of course has come from signs of a slowdown in the economic recovery, even though there have also been signs of economic progress. Speaking in Atlanta on Tuesday, Fed Chairman Ben Bernanke admitted that our economic growth has been slower than expected this year. He also said the inflation triggered by higher energy prices was a passing thing and that the economy should get its mojo back in the second half of the year. But even then, Bernanke feels economic conditions will still justify keeping the federal funds rate at exceptionall... 06/14/2011

Last week's lull in economic news will now be followed by a barrage of data from all directions. One report that matters is May Retail Sales, expected to dip slightly overall, but gain slightly when you take out slowing auto sales. The prices we consumers pay will be reflected in the inflation reports. The May Consumer Price Index (CPI) is forecast to come in flat, while the Core CPI, taking out food and gas, should be up 0.2%, not going in the right direction.Thursday reveals the status of homebuilding. May Housing Starts are expected up a bit, although not back to their pre-downturn levels. May Building Permits, indicating starts a short time out, should also come in at a similar rate, though down slightly from April. From my weekly enewsletter for real estate pros, INSIDE LENDING, fo... 06/14/2011