Jobless Claims Look Positive and Texas is Poised to Lead the Recovery

The report on new jobless claims looks somewhat positive. Nothing to jump up and down about but a step in the right direction. This is another sign of the recovering economy. Average claims for the last four weeks fell to 559,000. This is the lowest trailing four week average since January. Jobs lost in January of this year were over 740,000. This was the highest monthly figure since 1949. It is estimated that the July number will be below 350,000. This a significant improvement. We will still see high unemployment throughout the rest of the year. Many experts think we will see something over ten percent. I personally think we will see things start to flatten out and we will not reach the 10 percent number. My feeling is that we most likely over adjusted on job cuts in the winter and spring and we may see the need to maintain or even add some jobs back in the coming months. One firm estimates that Texas will be one of a handful of states that will emerge the quickest as far as job growth is concerned. The energy industry and the fact that we did not have a huge housing bubble were cited as the main reasons that Texas will recover lost jobs faster than other states.

NPR Report Shows Slow Far Behind the Loan Modification Process is

Found this report on NPR.org. It is a great source for information.

Outpacing Mortgage Help

That little blue line is the represents homeowners who've staved off foreclosure by reworking their mortgages. (Center for Responsible Lending)

By Laura Conaway

This chart shows two things, really. First, we can see the scale on which struggling homeowners have managed to keep their homes by getting lenders to rework the mortgages. Second, we can see the scale on which the sheer number of struggling homeowners has risen. The strugglers are outpacing the rescued by a factor of seven.

The Center for Responsible Lending, which produced the chart, is calling on Congress to protect families. The advocacy wants the goverment to the most of the federal Making Home Affordable program, which launched with a goal of reaching 4 million families and has so far gotten only 200,000. Mortgage servicers met with the Obama administration today and promised to speed things up.

The Center is also asking Congress for legal changes that would allow bankruptcy judges to rewrite mortages on principal residences. It's lobbying for the Consumer Financial Protection Agency proposed by the Obama administration. The new agency has faced criticism from Federal Reserve Chair Ben Bernanke and FDIC chair Sheila Bair, some of whose current power would be subsumed by the new regulator.

Planet Money pal Felix Salmon notes an idea from the Center for Responsible Lending's director, Keith Ernst, for a mediation program to work out deals between mortgage services and lenders. Salmon writes:

I fear that Congress is beginning to get reform fatigue, after so many attempted solutions have failed. But that's no reason to stop trying new things -- in fact, it's a good reason to try even harder.

Dallas Metro Home Prices Show Improvement

The latest news from the Case Shiller Home Price Index show that Dallas had a month to month increase in home prices of about 1.9 percent from April to May. Of the twenty metropolitan areas that the report covers, only Dallas and Denver showed an increase. Home prices are still about 8% lower than the peak in 2007. This represents a major opportunity for home buyers seeking good value in housing. The numbers show a slowing of the decline and an indicator of a market reversal. I think we will continue to see strengthening prices in the coming months. Dallas showed a 4.1% decline from the previous year and I believe that we will not see much further deterioration in local housing prices. The worst declines were in Phoenix (-34.2%) and Las Vegas (-32%). Overall prices for the twenty markets were down 17% year to year. Unfortunately this is the number that buyers often focus on which gives a distorted view of actual markets. Consult your realtor in order to get accurate market information about the specific area that you are interested in. In the Collin County area we are not seeing the type of price declines as described in the study. In fact, in some price points we are actually seeing a slight increase. Call me today for the latest information.

Dallas Metro New Home Sales Soar in June

Further evidence of an economic turnaround showed up yesterday in the form of new home sale statistics as Texas and in particular Houston and Dallas led the nation in new home sales for June. Houston was the top market for new home sales while the Dallas market was second. Texas had more new home permits than Florida and California combined. Much of the increase can be attributed to first time buyers starting to come to the market in mass in order to beat the November 30 deadline. The market is currently experiencing a push upward. Just recently released numbers showed an existing home sales increase of 3.6%. The two numbers are the best news that the local housing market has had in some time. Even with the news of new home sales being positive, home starts in the Dallas market are down about 70% from 2006 levels. This is important because builders need to keep inventories from bulging in the second half of the year and therefore putting renewed pressure on the local housing market. We will continue to monitor these statistics here on this Blog.

June New Home sales are up

Found this article from the Associated Press. It is very interesting.

WASHINGTON (AP) -- New home sales in June posted the fastest increase in more than eight years as buyers took advantage of bargain prices, low interest rates and a federal tax credit for first-time homeowners.

While home prices are still falling, the figures released Monday were another sign the housing market is finally bouncing back. Earlier this month, the government reported that new home construction rose to the highest level since last fall. And data out last week showed home resales rose almost 4 percent in June, the third straight monthly increase.

"The worst of the housing recession ... is now behind us," said David Resler, chief economist at Nomura Securities. "We're turning the corner toward increased activity in housing."

New home sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000, the Commerce Department reported Monday.

Shares of big homebuilders soared on the news, with Beazer Homes USA up by more than 13 percent and Hovnanian Enterprises rising 8 percent in afternoon trading. But with home prices still falling, these companies won't be making much money anytime soon.

The median sales price of $206,200 was down 12 percent from $234,300 a year earlier and off nearly 6 percent from $219,000 in May.

In addition to lower prices, buyers are rushing to tax advantage of a federal tax credit that covers 10 percent of the home price or up to $8,000 for first-time buyers. Home sales need to be completed by the end of November for buyers to take advantage.

"The window of opportunity is closing," said Bernard Markstein, senior economist for the National Association of Home Builders.

June's results were the strongest sales pace since November 2008 and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 360,000 units. The last time sales rose so dramatically was in December 2000.

There were 281,000 new homes for sale at the end of June, down more than 4 percent from May. At the current sales pace, that represents 8.8 months of supply - the lowest level since October 2007. If that number falls to just over 6 months, analysts say, builders will feel more comfortable ramping up construction.

Fallout from the housing crisis has played a central role in the U.S. recession, now the longest since World War II. Foreclosures have spiked, homebuilders have slashed construction, and financial companies have lost billions.

But it will still be a while before homebuilders turn into an engine for the economic recovery. Construction levels are still weak because builders still have too many unsold homes sitting vacant.

Collin County Real Estae Shows Strength

We have definitely seen a change in the direction of the local market. While our local media continues to write articles about the weakness of the local real estate market we are actually seeing a change in the direction of momentum. I do not mean to say that sales are up. Indeed they are not equal to the sales of last year. What has happened is that the sales to available inventory has reversed in direction. This is an indicator of what is to come. It is called our pending sales ratio. There is a direct correlation to the strength of the market and this ratio. What we are seeing is that the inventory of available homes continues to shrink. For instance in Plano we had 1167 active listings at the end of June. At the same time last year we had 1596. The months supply of inventory went from 5 months to 4.8 months. The most dramatic change was in Frisco where we went from 1597 to 1275. Months of inventory went from 6.8 months supply to 5.8 months supply. Our buyers are amazed at the fact that they are having a hard time finding a home that suits there needs at a price they can afford. They become frustrated when they see something nice and find that it already has an offer coming in. The really nice homes are leaving the market quickly. We saw the pending ratios bottom out in December of 2008 and January of 2009. These ratios have increased every month since the first of the year and we believe we will see these ratios continue to strengthen the rest of the year. If you would like the full report for all of the Collin County Markets please call me at 214-693-0593 or email me at bill@janwebb.com