Economic Week In Review

I’ve been gone a few weeks and boy, lots happened while I was away! I was staying in the south of France and yes I did get up to speed on real estate there! If any of you are thinking about purchasing a place in Cannes, Antibes, Nice, Grasse and surrounding areas, please contact me and I’ll be happy to discuss pricing for the area. Beware of the details though, for more information on taxes, obtaining a mortgage in France and other specifics check out Transitions Abroad!

Here are some highlights of the last 3 weeks:

Consumer confidence came in at a 17 year low of 57.2 reflecting the general mood that things are not as rosy as they appear to the economists.

New Home sales supposedly rose by 3.3%, however, sales were estimated at a rate of 526k units on an annualized basis. The problem with this is that the report said this number was up from March’s 509k number, but that number was originally reported as 526k units. Basically it was the downward revision that facilitated the upbeat headline. Somewhat of a shell game if you don’t dig further.

Some good news was in the Durable Goods headline on May 28th, the number was expected to show a slight decline and it posted an upside surprise. The reason for this is that due to the weak dollar we’re actually shipping manufactured goods to China and Brazil!

The Wall Street Journal reported on June 2nd that lender owned properties are up an amazing 660,000 homes. REO’s were 231,000 back in January. Borrowers falling behind on payments are ahead of those who are current on their mortgage by a 2 to 1 margin. If banks truly want to help consumers and the economy they will have to aggressively start to identify and offer loan modifications to those borrowers that can afford a reasonable payment. In California 1 out of every 183 homes is in foreclosure or default.

Pending home sales for April were up 6.3% which is positive. A true measure will be to look at how many of those in pending status actually close, but I remain positive none the less!

Fed Chairman Bernanke said he is finished cutting rates and is focusing more on the dollar and inflation. Speculation that the central bank will start raising interest rates has put mortgage rates at an 8 month high, which may in turn help motivate some buyer who are currently on the fence. Remember to factor in rate increases when evaluating whether to buy as a small price decrease may not be enough to offset a rate increase.

The Saudis said they will increase oil production to almost 10 million barrels of oil per day, in an apparent effort to stem the tide of unrest regarding oil prices throughout the world. The Saudis did blame the “national polices” of the West as the reason for the abnormal price or what they have called the speculative bubble for oil.

Worries about financial stocks, price of oil and the deterioration of the European markets, who have also been caught up in the subprime mess have contributed to several straight weeks of losses. Currently oil is approaching $140 per barrel and the Dow is down 71 at 12235.

The week ahead:

• Empire State Manufacturing Survey, Treasury International Capital report-(Today)
• Producer Price Index, Housing Starts, Industrial Production (Tuesday)
• MBA Purchase Applications(Wednesday)
• Jobless Claims , Leading Indicators, Philidelphia Fed Survey-(Thursday)
• quadruple witching (Friday)

Have a great week!

This entry was posted on 16. June 2008 at 19:40 and is filed under Housing Information/Stats, Economic Market Reports, Blogroll. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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