Summer Duldrums….
July 12th, 2009 Categories: Weekly Real Estate Activity In Ventura County
It’s SUMMER and it’s telling on the real estate market.
Normally at this time of year people who want to buy are out in full force looking and planning to move, and if they have kids, registered in their new school. They want to get over with before school starts.
But the economy has many people concerned about jobs so the norm has changed.
Until unemployment shows signs of decreasing (which it is not); until there are more new jobs being created (which isn’t the case); and the general public show strong confidence in the economy (people are perplexed and are tending to decrease spending); the real estate market will tend to go sideways with a bias to the upside.
Talk of another stimulus package if done correctly could work. What is a correct solution?
Allow zero income taxes, social security and medicare taxes for approximately 6-9 months and the economy will get legs.
This will get money into the hands of the consumer and small businesses and things will start to correct itself.
However I would suspect that consumers will ploy the increase in their paychecks into savings and business will utilize the funds in more advertising and marketing.
Then there will be the problme of weaning the taxpayer back to paying these taxes after not paying them for 6-9 months.
Also States and Federal government will have significantly less revenue coming in for a substantial period causing further lay offs in the public sector of the economy and further cuts in budgets.
But putting the money into the hands of wage earners and especially small businesses will yield better results than the first stimulus package which went basically to government entities and large banks. The net result stimulus #1 hasn’t yielded anything.
Humor For The Week:
GETTING OLD (Source: Star Dusters Newsletter, July 2009).
I’ve sure gotten old! I’ve had two bypass surgeries, a hip replacement, new knees, fought prostate cancer and diabetes. I’m half blind, can’t hear anything quieter than a jet engine, take 40 different medications that make me dizzy, winded, and subject to blackouts. Have bouts with dementia. Have poor circulation; hardly feel my hands and feet anymore. Can’t remember if I’m 85 or 92. Have lost all my friends.
But, thank God, I still have my driver’s license.
JUST A FUNNY (Submitted by Peggy Guyer to Lockheed Star Duster)
A Minneapolis couple decided to go to Florida to thaw out during a particularly icy winter. They planned to stay at the same hotel where they spent their honeymoon 20 years earlier.
Because of hectic schedules, it was difficult to coordinate their travel schedules. So, the husband left Minnesota and flew to Florida on Thursday, with his wife flying down the following day.
The husband checked into the hotel. There was a computer in his room, so he decided to send an e-mail to his wife.
However, he accidentally left out one letter in her e-mail address, and without realizing his error, sent the email.
Meanwhile somewhere in Houston, a widow had just returned home from her husband’s funeral.
He was a minister who was called home to glory following a heart attack. The widow decided to check her e-mail expecting messages from relatives and friends. After reading the first message, she screamed and fainted.
The widow’s son rushed into the room, found his mother on the floor, and saw the computer screen which read:
To: My Loving Wife
Subject: I’ve Arrived
Date: January 13, 2006
I know you’re surprised to hear from me.
They have computers here now and you are allowed to send e-mails to your loved ones. I’ve just arrived and have been checked in.
I see that everything has been prepared for your arrival tomorrow. Looking forward to seeing you then!
Hope your journey is as uneventful as mine was.
P. S. Sure is freaking hot down here.
My Musing For The Week:
A great deal of print and TV discussions focused on taxing the rich re., the universal health program being discussed in Washington.
When we run out of rich people who pays? And who determines what rich is?
Oh and I see that Al Gore made a comment this week which was “the Climate bill (now being discussed in Washington) will help bring about “Global Governance”.
It is not cap and trade but global governance.
Which brings me to a note by Thomas Paine in which he stated ” …..is the irresistible nature of truth that all it asks, and all it wants, is the liberty of appearing.”
This was expanded upon by Dr. Wayne Dyer in his book Excuses Begone!, is that truth only wants to show up; it doesn’t wish to overwhelm or rule us. So let’s allow ” the irresistible nature of truth” to make its appearance right now.
Our politicians would have difficulty with this wouldn’t you say?
Ventura County
Quiet. That sums up the activity for this week. Perhaps its because summer is now being felt or perhaps people are hunkering down.
People are nervous. They want to buy BUT will they have a job? Companies are continuing to decrease their work force; new jobs are not being created; so it is understandable that consumer confidence is “iffy” at this time.
Ventura County unemployment is continuing to go up and a number of businesses are taking steps to reduce employees because people are not spending and are salting away their money (saving).
This scenerio has to change before Ventura County real estate takes off.
To be sure the market is doing well under the circumstances and will continue to show appreciation, but at a slower rate.
The economy, new jobs and consumer confidence are needed to right the ship. Oh yes…..less political interference would bode well for everyone….but that isn’t going to occur.
The overall market in Ventura County is a “buyer’s” market. Home sale prices continue to show signs of increasing but there is a lag in sales (summer duldrums perhaps).
As noted in the table above there has been a 23% increase in sales but this increase rate has been diminishing over the last several weeks. At one time it had been above 35%.
Much has been said of interest rates….yes they are below 5%. BUT buyers need to have 20% down and a back end ratio or 41% or less to even start talking to banks about a mortgage. What is a back end ratio? This is simply taking all of your fixed monthly obligations (new mortgage, taxes, auto payments, other fixed loans, etc) and dividing your gross monthly into the above total. If it is 41% or less banks will start talking to you.
The other factor that has disturb the market is low ball appraisals. This appears to be correcting itself but it continues to undo a number of real estate transactions.
Your comments are welcomed.
