National Economic Outlook (February 2011)
July 11, 2011 by Hudson Watts · Leave a Comment
Although the economy has officially been out of recession for quite some time, those aspects of economic behavior most important to the real estate markets, namely, jobs and borrowing, have remained stuck in the ditch. The latest data suggest, however, that consumers will soon be spending more. Jobs are growing at a faster clip, and consumers have done much repair to their personal finances.
Since the end of 2008, consumers have cut 10 percent off their credit card debt, a very large amount that gets them back to where they were before the real estate boom. With finances at pre-boom levels, consumers will be buying things again, although more cautiously this time around.
Renewed spending is showing up in the retail sector, where jobs at clothing stores were up 4 percent over last year, and jobs at restaurants were up 2 percent.
Job gains also continued in manufacturing, health care, and business services, with jobs at temp agencies up a very strong 16 percent. Overall job gains in the past year were almost 1 percent, despite the fact that local governments, with lower tax revenues, cut more positions. If we see total job gains around 1.5 percent in the next few months, home sales will pick up rather smartly.
After falling steadily since 2007, home prices have bottomed out in many local markets. On average, prices were down just 1 percent in the past year. With prices low, mortgage rates low, and consumer finances largely repaired, a much better real estate market can be expected this year.
Sleepers in the E-Commerce Boom
July 11, 2011 by Charlie Stedman · Leave a Comment
E-commerce is one of the few areas of constant growth in the United States these days. It’s the reason Wal-Mart (Nasdaq: WMT) wants to unseat Amazon (Nasdaq: AMZN) as the leader in online retail sales.
Check out what the first-quarter 2011 comScore report had to say about online retail sales:
- Online retail sales totaled $38 billion in the first quarter of 2011. This marks a 12 percent rise over the first quarter of 2010.
- It is the sixth straight quarter with positive growth over the previous year and the second consecutive quarter with double-digit growth over the previous year.
- The number of online buyers increased by seven percent.
- The transactions per buyer increased by nine percent.
- The dollars per transaction fell by four percent, meaning people are purchasing a wider array of products.
These growth trends are expected to continue. Especially when fuel isn’t getting any cheaper. As
4 Disadvantages of a Student Charge Card
July 11, 2011 by Laura Reveley · Leave a Comment
A student charge card is often necessary to make ongoing purchases while you are in school and not earning an income. For example, many students must place expenses like books and meal plans on a charge card since these are not covered in student loan sums. Student charge cards can help build your credit while you are in school, but this plan works only if you are able to repay the cards on time. There are a number of challenges that can arise and eat away at the benefits of a student charge card.
Lack of Collateral
When a student secures a charge card, that student rarely has a high degree of assets in his or her name. This means two things: first, the credit line on a student charge card is typically very low; second, a cosigner may be required. Both of these factors lessen the value of a credit card to improve a student’s credit rating. Credit cards can build credit, but they do so only if the user maintains a low balance and repays the card by himself or herself.
Mortgage Delinquencies Decline Across the U.S.
July 11, 2011 by Hudson Watts · Leave a Comment
According to a recent survey released by the Mortgage Bankers Association (MBA), the “latest delinquency numbers represent significant, across-the-board decreases in mortgage delinquency rates in the U.S.,” according to MBA’s chief economist, Jay Brinkmann[1]. In fact, total delinquencies (not including homes already in foreclosure) are at the lowest levels since the end of 2008, and mortgages with one payment past due alone are at their lowest level since 2007, which MBA marks as the “very beginning of the recession.”
Perhaps even more more promising: at the beginning of 2010 90-day-or-more delinquencies were at an all time high at the beginning of 2010 but have now fallen 28 percent, and 48 of the 50 states experienced a drop in this area.
These numbers indicate, to Brinkmann, that “we have clearly turned a corner.” He went on to say that “absent a significant economic reversal, the delinquency picture should continue to improve during 2011.” Brinkmann cited high levels of unemployment for the still relatively slow recovery, but did point out that “the economy did add over 1.2 million private sector jobs during 2010.”
Many states are also adding homeowner-aid programs to the roster aimed specifically at out-of-work homeowners. For example, in South
Finding Good Tenants
July 10, 2011 by Hudson Watts · Leave a Comment
Ideally, you’d have tenants who paid promptly every month, never complained, and lived in your property for a long time while maintaining it in pristine condition. But that ideal seldom happens for the simple fact that we’re dealing with human beings. They move, get sick, marry, have different temperaments and needs, and so forth – all of which can affect the goals you have for your properties.
However, there are general guidelines you can follow in order to get the best possible tenants, the ones who do pay on time and who seldom complain unless there’s a good reason to do so:
Guideline 1: Qualify Your Applicants
This is a vital first step, because it helps identify great tenants and eliminate potential trouble-makers. The process of qualification involves a combination of asking good questions and using your intuition about an applicant. What ar