Carrie Miller

December 5, 2008 Jobs lost, recession confirmed Reflecting a deepening U.S. recession, the unemployment rate climbed to its highest level in 15 years in November as the economy shed more than half-a-million jobs. In other news, the committee of economists responsible for dating the nation's business cycles declared that the United States went into recession last December. That makes the current downturn already longer than average. For the week, the S&P 500 Index fell –2.2% to 876.1 (for a year-to-date total return of –39.1%). The yield of the 10-year U.S. Treasury note declined 22 basis points to 2.71% (for a year-to-date decrease of –1.33 percentage points). Unemployment hit 15-year high, job losses exceeded half a million The unemployment rate rose to 6.7% in November from 6.5% in October, the Labor Department reported Friday. It's the highest unemployment rate since October 1993. Nonfarm payrolls, another closely watched employment indicator that's based on a separate survey, plunged a worse-than-expected 533,000 in the largest one-month drop since December 1974. Since the start of the recession in December 2007, the number of unemployed has increased by 2.7 million, and the unemployment rate has jumped by 1.7 percentage points. The employment report noted heavy job losses in November in a wide range of industries, including a decline of more than 90,000 in the retail sector. One bright spot was health care employment, which grew by 34,000 in November. Over the past 12 months, health care has added 369,000 jobs. It's official: Recession started a year ago The National Bureau of Economic Research (NBER) on Monday declared that a recession officially started at the end of 2007. Among the factors cited by the NBER is payroll employment, which has declined every month since December 2007. "With the formal confirmation by the NBER, this recession is already longer than the post-World War II average of 10.5 months, and certainly longer than the last two recessions, which lasted 8 months each," said Vanguard economist Roger Aliaga-Diaz. In the last 50 years, the longest a recession has lasted is 16 months. Manufacturing, service activity slumped A gauge of manufacturing activity reflected significant weakness in November. The Institute for Supply Management (ISM) reported its manufacturing index dropped to 36.2 in November compared with October's 38.9. The index, which has declined for four straight months, is at its lowest level since the early 1980s. A reading below 50 indicates economic contraction. In another sign of trouble for the manufacturing sector, factory orders dropped a worse-than-expected –5.1% in October. The service sector of the economy is also struggling. The ISM nonmanufacturing index tumbled to a new record low of 37.3 in November from the previous record low of 44.4 in October. The weakness was widespread, with the components representing business activity, new orders, and employment all at their lowest levels since the index was established in 1997. Productivity up, labor costs down Productivity, which measures output per worker, grew an upwardly revised 1.3% (annualized) in the third quarter compared with a preliminary estimate of 1.1%. Productivity has been rising over the past year as businesses cut workers' hours amid the U.S. economic slowdown. Unit labor costs—a closely watched indicator of inflationary pressures—were revised downward to 2.8% (annualized) in the third quarter from a preliminary estimate of 3.6%. Fed survey painted bleak picture The Beige Book, the Federal Reserve's anecdotal survey of regional economies, revealed further economic weakening nationally. The survey, which reflected conditions during November, found further deterioration in the labor market contributing to declining consumer spending. And almost all regions reported "weak housing markets characterized by reduced selling prices and low, but stable, sales activity." In addition, business and consumer lending continued to slow. The survey also found the downturn has contributed to a slackening of price pressures, "particularly for energy, fuel, and many raw materials and food products." Consumer credit dropped The total amount of consumer installment credit outstanding decreased in October by $3.5 billion (a –1.6% annualized rate). Revolving debt (such as credit cards) edged down –0.2% and nonrevolving debt (such as auto and personal loans) fell –2.5%. Construction spending declined Overall construction spending dropped –1.2% from September to October amid continued weakness in residential construction, which dropped –3.5% for a year-over-year decline of –23.6%. Nonresidential construction edged down –0.1%. The economic week ahead Next week's news should provide insight on consumer spending with the release Friday of the retail sales report for November. Also due are reports on the trade deficit (Thursday), wholesale inflation (Friday), and business inventories (Friday).

December 5, 2008 Jobs lost, recession confirmed Reflecting a deepening U.S. recession, the unemployment rate climbed to its highest level in 15 years in November as the economy shed more than half-a-million jobs. In other news, the committee of economists responsible for dating the nation's business cycles declared that the United States went into recession last December. That makes the current downturn already longer than average. For the week, the S&P 500 Index fell –2.2% to 876.1 (for a year-to-date total return of –39.1%). The yield of the 10-year U.S. Treasury note declined 22 basis points to 2.71% (for a year-to-date decrease of –1.33 percentage points). Unemployment hit 15-year high, job losses exceeded half a million The unemployment rate rose to 6.7% in November from 6.5% in October, the Labor Department reported Friday. It's the highest unemployment rate since October 1993. Nonfarm payrolls, another closely watched employment indicator that's based on a separate survey, plunged a worse-than-expected 533,000 in the largest one-month drop since December 1974. Since the start of the recession in December 2007, the number of unemployed has increased by 2.7 million, and the unemployment rate has jumped by 1.7 percentage points. The employment report noted heavy job losses in November in a wide range of industries, including a decline of more than 90,000 in the retail sector. One bright spot was health care employment, which grew by 34,000 in November. Over the past 12 months, health care has added 369,000 jobs. It's official: Recession started a year ago The National Bureau of Economic Research (NBER) on Monday declared that a recession officially started at the end of 2007. Among the factors cited by the NBER is payroll employment, which has declined every month since December 2007. "With the formal confirmation by the NBER, this recession is already longer than the post-World War II average of 10.5 months, and certainly longer than the last two recessions, which lasted 8 months each," said Vanguard economist Roger Aliaga-Diaz. In the last 50 years, the longest a recession has lasted is 16 months. Manufacturing, service activity slumped A gauge of manufacturing activity reflected significant weakness in November. The Institute for Supply Management (ISM) reported its manufacturing index dropped to 36.2 in November compared with October's 38.9. The index, which has declined for four straight months, is at its lowest level since the early 1980s. A reading below 50 indicates economic contraction. In another sign of trouble for the manufacturing sector, factory orders dropped a worse-than-expected –5.1% in October. The service sector of the economy is also struggling. The ISM nonmanufacturing index tumbled to a new record low of 37.3 in November from the previous record low of 44.4 in October. The weakness was widespread, with the components representing business activity, new orders, and employment all at their lowest levels since the index was established in 1997. Productivity up, labor costs down Productivity, which measures output per worker, grew an upwardly revised 1.3% (annualized) in the third quarter compared with a preliminary estimate of 1.1%. Productivity has been rising over the past year as businesses cut workers' hours amid the U.S. economic slowdown. Unit labor costs—a closely watched indicator of inflationary pressures—were revised downward to 2.8% (annualized) in the third quarter from a preliminary estimate of 3.6%. Fed survey painted bleak picture The Beige Book, the Federal Reserve's anecdotal survey of regional economies, revealed further economic weakening nationally. The survey, which reflected conditions during November, found further deterioration in the labor market contributing to declining consumer spending. And almost all regions reported "weak housing markets characterized by reduced selling prices and low, but stable, sales activity." In addition, business and consumer lending continued to slow. The survey also found the downturn has contributed to a slackening of price pressures, "particularly for energy, fuel, and many raw materials and food products." Consumer credit dropped The total amount of consumer installment credit outstanding decreased in October by $3.5 billion (a –1.6% annualized rate). Revolving debt (such as credit cards) edged down –0.2% and nonrevolving debt (such as auto and personal loans) fell –2.5%. Construction spending declined Overall construction spending dropped –1.2% from September to October amid continued weakness in residential construction, which dropped –3.5% for a year-over-year decline of –23.6%. Nonresidential construction edged down –0.1%. The economic week ahead Next week's news should provide insight on consumer spending with the release Friday of the retail sales report for November. Also due are reports on the trade deficit (Thursday), wholesale inflation (Friday), and business inventories (Friday).

Opportunity of a Lifetime for First-Time Buyers

For aspiring home owners who find their goal stubbornly elusive, newly enacted legislation providing a tax credit of as much as $7,500 for first-time home buyers might just be the opportunity of a lifetime.

But like so many of the good things in life, time is of the essence for buyers who want to take advantage of this outstanding opportunity. Only homes purchased on or after April 9, 2008 and before July 1, 2009 are eligible.

http://federalhousingtaxcredit.com

Call me today to help you find the right first Home!! Carrie

Good news for California housing
Home sales in Southern California increased in July compared with a year ago, while foreclosures decreased in month-over-month comparisons, according to a recent report. The California Legislature also is working with consumer and lending groups on a bill that would protect consumers from predatory lending and establish guidelines and restrictions on brokers and lenders.

MAKING SENSE OF THE STORY FOR CONSUMERS

· Although the foreclosure rate is approximately double what it was a year ago, in month-over-month comparisons, it is 8 percent lower, indicating that foreclosures could be reaching a plateau. In a report released by RealtyTrac, default notices, which are the first phase in foreclosure proceedings, declined 4 percent from June.

· If signed, the bill will prohibit lenders from offering pick-a-payment loans to subprime borrowers; establish limits and timeframes on prepayment penalties to subprime borrowers; and prohibit brokers from leading subprime borrowers into loans with higher interest rates if they can qualify for one with a lower interest rate. The bill also would prohibit lenders from paying a financial incentive to brokers for steering borrowers into loans with prepayment penalties or higher interest rates. Additionally, mortgage brokers would be required to place the consumer's financial interests above their own.

We may see a surge of buyers now looking to buy before the end of summer....best of luck!!

Home sales for July 2008 surpassed the sales for the previous last to years sales in the month of July. This is encouraging for Realtors, Sellers and Buyers alike. Bush's controversial Housing Bill which created $400 billion in revenue for funding which was signed in hopes of revitalizing the housing market has had lack-luster effects. Some analysts say it actually made it more difficult for Seller's to sell their homes. Personally speaking, I find that it was the hopes and dreams of the past 3 years Buyers that created the situation that we are now in. The predatory lending practices which seemed realistic then, actually weren't realistic once the loans reset at the final interest rate. Well, I am probably singing to the choir here, but it was the dream of the home equity gains and low interest rates that sucked most Buyers in, instead of the past reason to buy a house which was, "That it was a good investment instead of renting." I mean you have to live somewhere, why pay someone else's mortgage..?

The good news is for those who got into this mortgage mess, you have several ways now that you can get some relief. The best being banks are now able to Re-finance the loans at the adjusted value of your home. Less the value of the loan at a fixed rate will level off the mortgage payment to hopefully a manageable amount.

Also Short-sales, which are a portion of the current mortgage that is negotiated with a new Buyer can with some negative effect on Seller's credit, can alleviate the mortgage that may have increased as much as 3 times of the original payment.

Whether you are a homeowner or looking to buy, it may take some more time before we see a stable market.