Good afternoon…and sorry to all you loyal listeners for the delay…
I hope you enjoyed the first spring-like weekend in what seems like years. I don’t know
about you, but the Stanley cup playoffs begins tomorrow and there isn’t a greater event
in sports if you ask me. The intensity can’t be beat! On a more serious note…
On today’s call: Markets, Housing, Commercial financing, Interest Rates
The markets opened with a bang this morning, as the S&P 500 surpassed its record close
set earlier this month. Italy’s new prime minister finally named his new cabinet members,
which ended two months of political deadlock and increasing investors’ confidence in that
nation. Despite all the economic turmoil both domestically and abroad, the S&P is up for
the sixth month in a row. It was also reported that the economy expanded at a “tepid”
2.5% rate in the first quarter. Investors took this weak info as a sign that the Fed will
continue an easier money policy via asset purchases, keeping rates as low as possible.
In housing, another positive sign was reported by the NAR, this time with pending home
sales. March’s reading showed a gain of 1.5%, or ½% higher than what was predicted. The
pendulum is now swinging the other way it looks like, which means that contract activity
is still having trouble gaining steam. This is because of the limited housing supply, not
lowered buyer demand. The NAR has speculated that this trend should continue for now,
but contract activity should start increasing as the year progresses. In Chicago, it has been
estimated that local construction contracts will rise almost 7.5% this year. First quarter
totals for both residential and commercial properties totaled $1.3 billion, up close to 20%
from a year earlier. A lack of land, labor and materials is hindering builders but they’re
looking to ramp up production in time for the main buying season.
We are now capable of financing commercial properties up between $750,000 and $35
million. We have partnered with a couple of brokers who’ll finance just about any type
of property except gas stations. After researching different brokers’ programs, we feel
that the companies we’re now affiliated with are top-notch, especially since they’re
offering non-recourse deals and longer amortization terms. Please keep this all in mind.
Interest rates got slightly better last week, with the 30 year fixed now firmly in the mid-3%
range. Despite today’s stock news, the bond markets didn’t overreact and we’re not
expecting to see much change until possibly the end of the week, where the jobs reports
for March will be reported. Stay tuned…
Have a great week everyone. Please pass this along to your networks and please give me
a call or email if you have questions.
Thanks,
JP
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