Employment Numbers & Real Estate Bubbles

By
Real Estate Broker/Owner with Winston Realty, Inc. BK63078915

RATES DROP ON DISAPPOINTING EMPLOYMENT NUMBERS

 

Two-hundred thousand has been the magic number. If the economy could continually create 200,000 or-more new jobs per month, then it could withstand higher interest rates. September’ saw only 142,000 jobs created, the second-consecutive month of sub-200,000 job growth.

 

 

Now, everyone is pointing to December. Fed Chair Janet Yellen has said a rate increase is still on the table this year. Traders are pricing fed funds rate futures contracts for a 36% chance of a rate increase in December.

 

 

The recent drop in mortgage rates, combined with the TILA-RESPA regulatory change from October 3rd, have sent mortgage activity skyrocketing. Refinances were up 24%, and purchases were up 27%. Mortgage lending activity points to higher home sales for September when the numbers are released later this month. We doubt these numbers will hold for October.

 

FORMENTING BUBBLES

 

Chatter on a possible real estate bubble has been amplified in recent weeks. Home prices continue to rise, and in some markets they continue to rise briskly. CoreLogic reported this week that its Home Price Index rose for the 42nd-consecutive month in August. CoreLogic's index is up 6.9% year over year. Month over month, the index is up 1.2%. Should we be concerned?


2015 is certainly different from 2006. We have a more bifurcated market today. Outside of tiny markets – San Francisco, New York, Washington D.C, and Miami, for instance – most of the price appreciation has been realized in the low end. Starter homes and basic tract homes have been the hot items.


 

Posted by

P. Winston Heverly, GRI, ABR, SFR, CDPE, CIAS, PA

We service all of Palm Beach County and S. Florida

 

 513 N. Country Club Drive, Suite 200, Atlantis, FL 33462

Office: (561) 247-7376 - Fax: (561) 537-7223 - Cell: (561) 629-2660

Email: PWH@WinstonRealty.co - Web: WinstonRealty

 

Search: Atlantis, Boca Raton, Lake Worth, Palm Beach Gardens,

South Palm Beach, West Palm Beach           

 

                      

              

P Winston Heverly - Real Estate Agent

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Rainmaker
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Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Winston Heverly Yes, it is a bubble.  If they aren't buildig new, then the existing stock is forced to go up.

Bill Roberts

 

Oct 22, 2015 11:12 PM #1
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