Gasoline top of Retail Sales for April
July 15, 2011
Retail Sales in April for food and service business hit $389.4 billion, which is an increase of 0.5% and is 7.6% above what was seen in April of 2010, as reported by the latest figures from the Census Bureau. However, this was the weakest gain seen in nine months.
Entire sales for the February-through-April 2011 stage were up 8.1% from the same time a year ago.
Gasoline was the main mover seen in retail sales for the month of April. Sales at gasoline stations grossed around 10.5% of April’s sales and marked a 2.7% gain for the month. The Bureau announced that sales at gasoline stations were up 21.8% over April of 2010.
David Resler, chief economist at Nomura Securities International Inc. in New York stated, “Higher gas prices are starting to cut into discretionary spending but a wholesale retrenchment by consumers is not likely,” and went on to say, “More jobs are being created. The outlook for the economy is one of moderate growth.”
Fuel prices also influenced producers. The Producer Price Index for finished goods increased 0.8% in the month of April, as reported by the Bureau of Labor Statistics. This gain came after increases of 0.7% seen in the month of March and 1.6% seen in the month of February.
Around ¾ of April’s advance in the finished goods index is due to a 2.5% hike in prices for finished energy goods, as stated by the Bureau. Prices for both finished goods not including foods and energy and for finished consumer foods rose 0.3% in the month of April.
United States import prices rose 2.2% in the month of April, as reported by the U.S. Bureau of Labor Statistics, recognizing that higher fuel, along with non-fuel, prices added to the advance. Prices for U.S. exports also rose, by 1.1% in the month of April.
Import fuel prices rose 6.7% during the month of April and accounted for around 80% of the overall rise in import prices, stated the Bureau. April’s 7.2% rise in petroleum prices more than offset the 2.7% drop seen in natural gas prices. Prices for import fuel increased 34.8% for the year ended in April, motivated by a 36.8% rise in petroleum prices. natural gas prices, on the other hand have gone down 0.1% over the past 12 months.
total March exports of $172.7 billion and imports of $220.8 billion brought on a deficit of $48.2 billion, which is up from $45.4 billion seen in the month of February, as reported by the latest figures from the Census Bureau and the Bureau of Economic Analysis. Exports in the month of March were $7.7 billion more than the exports seen in February of $165 billion and March’s imports were $10.4 billion greater than February’s imports of $210.4 billion.
First claims for unemployment benefits were still on the rise, but had slowed back from the previous week’s increase, as reported by the latest figures from the Employment and Training Administration. For the week that ended on May 7, the advance figure for seasonally adjusted initial claims was 434,000, which is a decrease of 44,000 from the prior week’s revised figure of 478,000.
the four-week moving average was 436,750, which is an increase of 4,500 from the prior week’s revised average of 432,250. The advance number for the total seasonally adjusted number of insured unemployed workers during the week that ended on April 30 was 3,756,000, which is an increase of 5,000 from the prior week’s level of 3,751,000. The four-week moving average was at 3,718,500, which is a rise of 13,250 from the priors week revised average of 3,705,250.
Upcoming News includes April’s housing starts, construction permit information from the Census Bureau. Industrial production and capacity utilization for April will be announced by the Federal Reserve.
The Employment and Training Administration will announce initial jobless benefits claims data for the week; the National Association of REALTORS will announce existing home sales information for April, and the Conference Board will announce its leading indicators info for April.
Pending Home Sales Increased
May 27, 2011
Pending home sales, which is an indicator that looks to the future via signed contracts, increased 2.1 percent in the month of February after seeing a 2.8 percent fall in the month of the January. On a year over year basis, the indicator shows that sales are down 9.3 percent.
Retail sales increased 0.2 percent for the week that ended on March 26 as reported by the ICSC-Goldman Sachs index. On a year-over-year basis, retailers saw sales rise 2.6 percent.
The Standard & Poor’s/Case-Shiller 20-city housing price index (on a non-seasonally adjusted basis) decreased 1 percent in the month of January after seeing a 1 percent decrease in the month of December. On a year-over-year basis, prices decreased 3.1 percent when compared with of January 2010.
The Mortgage Bankers Association stated its seasonally adjusted composite index of mortgage applications for the week that ended on March 25 decreased 7.5 percent, while refinancing applications fell 10.1 percent and purchase volume decreased 1.7 percent.
In the month of February, factory orders decreased 0.1 percent to a seasonally adjusted $446 billion, after an upwardly revised 3.3 percent rise in the month of January, not counting the volatile transportation sector, orders increased 0.1 percent.
The Institute for Supply Management reported the monthly composite index of manufacturing activity decreased to 61.2 in the month of March after seeing 61.4 in the month of February. A reading above 50 signifies expansion. This was the 20th straight month of growth.
Total construction spending decreased 1.4 percent to $760.6 billion in the month of February, after seeing a 0.7 percent decline in the month of January. Economists had expected to see a decrease of 0.3 percent in the month of February.
First claims for unemployment benefits decreased by 6,000 to 388,000 for the week that ended on March 26, while continuing claims for the week that ended on March 19 decreased by 51,000 to 3.7 million. The monthly unemployment rate decreased to 8.8 percent in the month of March after seeing it at 8.9 percent in the month of February.
Upcoming reports on
April 7 – chain store sales
April 8 – wholesale trade
New Government Law Affecting Rental Property Owners
April 28, 2011
If you own a rental property, you should be prepared for the upcoming year when you are ready to file your taxes as a new law is in place if you use a handyman or other vendors on even one rental property.
Beginning this year, even if you only own one rental property, you must keep track of every vendor that does at least $600 worth of work on your property. The new law requires you to send each person that works on your home and earns at least $600 an IRS 1099 form.
This is not really a new requirement as larger rental property owners have been doing this for years. However, the federal government has now enacted the Small Business Jobs Acts of 2010 (H.R. 5297) which has expanded the law to include all property owners, even if the rental is only for extra income, as a sideline, or for your retirement savings. All rental property owners are now deemed to be “conducting a trade or business”, so the 1099 requirement will apply to them starting in 2011.
If you do own a rental property you have a legal obligation to obtain information from any person working on your property which includes their name, address, Social Security number or other tax identification and to keep an accurate record of the amount of money you pay them throughout the year. At the end of the year, you must issue each vendor that was paid at least $600 a 1099 while retaining a copy for yourself.
Complying with the New Law
This new law takes effect for the 2011 tax year so you should have already started tracking any payments you have made to any vendor starting in January of 2011. You will need to keep track of all payments for the entire year and then your vendor a 1099 form at the beginning of 2012.
There are a few exceptions to the requirements.
Burden – you will have to gather and keep all information on your vendors and issue the forms, which may create a hardship for you.
Duration – if the property is only a temporary rental of your residence.
Income – your income from the rental property does not meet the minimal threshold requirements.
More information will be coming, as the IRS will fill in all the details on what constitutes a hardship and what the minimal income is, you will want to pay close attention to these factors when they are released.
The requirements do apply to all independent contractors or freelance workers that provide any service in the rental real estate context. These include painters, plumbers, electricians, gardeners, cleaning services, landscapers, accountants, and yes, even your handyman. All service providers that do not receive a W-2 form from you that earn at least $600 for the year. The amount paid must be tracked as you pay a painter $200 one month and then within a couple of months you pay the same painter another $400, then they would need to receive a 1099 form from you.
You should make sure that your tracking procedure is one that will work properly to track the earnings of your vendors. If you work with an accountant, you should speak with him or her to ensure you are keeping the records accurate and easy to understand. The record keeping procedure should include how you paid them as well whether it be cash, credit card, debit card, or check.
Filing Late Penalties
The dates for filing will be set forth by the IRS. You will want to ensure you know when to file and when all vendors need to receive the 1099 forms. Lat filing or failure to file will result in penalties up to $250.
You be able to request a 30-day extension in order to get your forms to the IRS but this will not allow you more time to get the 1099 forms to your vendors. Your vendors need this form in order to file their tax returns on time.
This new requirement is a bit of surprise for those that only have one rental property. If you manage property for a small owner, be sure to let them know about the new law requirements. If you are the owner, be sure to learn the deadlines for filing and start keep tracking of your payments to any vendors.
Existing home sales increased
March 31, 2011
Existing home sales increased 2.7 percent in the month of January to a seasonally adjusted annual rate of 5.36 million units up from 5.28 million units reported in the month of December. The inventory of unsold homes on the market fell 5.1 percent to 3.38 million, which is a 7.6-month supply at the current sales pace, down from an 8.2-month supply seen in the month of December.
The Mortgage Bankers Association reported its seasonally adjusted composite index of mortgage applications for the week that ended on February 18 increased 13.2 percent. Refinancing applications rose 17.8 percent along with purchase volume rising 5.1 percent.
The consumer confidence index increased to 70.4 in the month of February from an upwardly revised 64.8 seen in the month of January. This was the highest level seen since February of 2008. The index was benchmarked at 100 in 1985, which was a year chosen as it was neither a peak nor a trough in consumer confidence.
The Standard & Poor’s/Case-Shiller 20-city housing price index on a non-seasonally adjusted basis decreased 1 percent in the month of December after seeing a 1 percent fall in the month of November. On a year-over-year basis, prices decreased 2.4 percent when compared with December of 2009.
First claims for unemployment benefits decreased by 22,000 to 391,000 for the week that ended on February 19, while continuing claims for the week that ended on February 12 decreased by 145,000 to 3.79 million.
Durable goods orders, which are items that are expected to last three or more years increased 2.7 percent in the month of January after a revised 0.4 percent fall in the month of December. Excluding volatile transportation-related goods, orders posted a monthly decline of 3.6 percent.
Sales of new home decreased 12.6 percent in the month of January to a seasonally adjusted annual rate of 284,000 units from a revised rate of 325,000 units seen in the month of December. Economists had believed to see a pace of 310,000 units.
Upcoming economic calendar
March 1 – construction spending
Housing Market Index Increased One Point
March 28, 2011
The housing market index increased one point in the month of March to 17 according to the National Association of Home Builders/Wells Fargo housing market index rose one point in March to 17. Any index reading below 50 signifies negative sentiment about the housing market.
According to the ICSC-Goldman Sachs index, retail sales increased 0.1 percent for the week that ended on March 12 making the year over year basis sales increase that retailers enjoyed at 3.1 percent.
The seasonally adjusted composite of index of mortgage applications for the week that ended on March 11 as reported by the Mortgage Bankers Association decreased 0.7 percent, while refinancing applications rose 0.9 percent and purchase volume decreased 4 percent.
New single family homes and apartment construction combined in the month of February decreased 22.5 percent to a seasonally adjusted annual rate of 479,000 units. Single family starts fell 11.8 percent while multifamily starts fell 46.1 percent. Applications for new building permits, which are an indicator of future activity, decreased 8.2 percent to an annual rate of 517,000 units.
The producer price index that tracks wholesale price inflation increased 1.6 percent in the month of February after a revised 0.7 percent rise in the month of January. Core prices not including food and fuel increased 0.2 percent in the month of February.
Consumer prices increased a seasonally adjusted 0.5 percent in the month February after seeing a 0.4 percent rise in the month of January. For the year, the seasonally adjusted consumer prices are up 2.2 percent.
Industrial production at factories, mines, and utilities decreased 0.1 percent in the month of February, after a revised 0.3 percent increase in the month of January, compared to a year ago; industrial production is up 5.6 percent, while capacity utilization was 76.3 percent in the month of February.
First claims for unemployment benefits fell by 16,000 to 385,000 for the week that ended on March 12, while continuing claims for the week that ended on March 5 decreased by 80,000 to 3.7 million.
Economic Calendar Upcoming Reports
March 21 – existing home sales
March 23 – new home sales
Personal Incomes Rose in December
March 19, 2011
The headlines for the economy were great last week with the news that the personal incomes rose in December as reported by the Bureau of Economic Analysis. Personal income raised $54.5 billion or 0.4% during the month of December and disposable personal income rose $47.3 billion or 0.4 %. Along with this, personal consumption expenditures (PCE) raised $69.5 billion or 0.7%.
December’s gains followed a comparable performance in the month of November, which was a 0.4% rise in personal income, a 0.3% gain in DPI and a 0.3% rise in PCE, which were based on revised estimates.
A major area of growth for the month of December’s income increases was in private wages and salary disbursements, which raised $15.5 billion in the month of December when compared with a rise of $5.9 billion in the month of November.
Personal saving which is DPI less personal outlays was $614.1 billion in the month of December, dipping just a bit from November’s savings of $634.4 billion. Personal saving as a percentage of disposable personal income was 5.3% in the month of December after seeing 5.5% in the month of November.
Income was up for the month of December, construction spending fell by 2.5% from November to a seasonally adjusted annual rate of $787.9 billion, as reported by the Census Bureau’s latest figures, released last week. December’s construction performance was 6.4% under the December 2009 estimate of $841.8 billion. The total value of construction for the year of 2010 was $814.2 billion, 10.3% under the $907.8 billion that was spent in 2009, reported the Census Bureau.
Private construction spending was at a seasonally adjusted annual rate of $486.9 billion, 2.2% under November’s revised estimate of $498 billion. Residential construction was at a seasonally adjusted annual rate of $226.4 billion in the month of December, which was 4.1% under November’s revised estimate of $236.1 billion. Non-residential construction was at a seasonally adjusted annual rate of $260.5 billion in the month of December, which was 0.5% below November’s revised estimate of $261.9 billion.
The automotive sector saw big gains in January. Car and truck sales for January rose 17.3% when compared to January 2010 and were up 0.6% in comparison to December, as reported by research from Autodata Corp.
Chrysler and General Motors were at the top with 23% and 22% sales gains, respectively. Other top car makers showed huge gains, with Honda and Nissan both seeing a 15% increase and Ford gaining 13%
Upcoming news includes the initial jobless benefits claims for the week, wholesale trade for December and the budget figures from the Treasury Department. The Census Bureau and the Bureau of Economic Analysis will report the figures for December’s balance of trade, and the University of Michigan will release its consumer sentiment figures for the month of February.
72% of US Cities Cheaper to Buy than Rent
March 12, 2011
Even though the number of renters is rising across America it is cheaper to purchase a home instead of rent in 72% of the fifty largest cities in the United States as reported by Trulia, a real estate search and marketing website.
Pete Flint, CEO and co-founder of Trulia stated, “Since the start of the ‘Great Recession,’ many former homeowners have flooded the rental market. Following the principles of supply and demand, renting has become relatively more expensive than buying in most markets.”
“Though necessary for achieving true economic recovery, stricter bank lending practices have also further aggravated the struggling housing market in the short term. Even highly qualified homebuyers face intense scrutiny on their income, savings, existing debt and credit history before they can get a mortgage loan.”
The rent vs. buy index compares the medial list price with the median rent price for a 2-bedroom apartment, town homes, and condominiums that were listed on Trulia.com on January 10, 2011.
The price-to-rent ratio of 1 to 15 means that it is quite a bit cheaper to buy than to rent in a specific city. A ratio between 16 and 20 means that it is more expensive to rent than to buy, however according to the family’s situation, buying could “make financial sense,” reported Trulia. Any ratio above 20 indicates that owning is more costly than renting in a city.
In 36 of the 50 of the United States most populous cities, buying a two-bedroom home is less expensive than renting one. These cities are ones that have been very hard by foreclosures.
Top Ten cities to buy vs. rent:
Rank/City/State/Price to Rent Ratio
1/Miami/Florida/6
2/Las Vegas/Nevada/6
3/Arlington/Texas/7
4/Mesa/Arizona/8
5/Phoenix/Arizona/8
6/Jacksonville/Florida/8
7/Sacramento/California/10
8/San Antonio/Texas/11
9/Fresno/California/11
10/El Paso/Texas/11
Source: Trulia
In ten cities, renting is cheaper. This index considers the total cost of owning a home compared to the total cost of renting. The total cost of ownership includes “mortgage principal and interest, property taxes, hazard insurance, closing costs at time of purchase, homeowner’s association dues, and private mortgage insurance”. The ownership cost calculations also includes tax advantages from mortgage interest, property tax and closing-cost deductions. The calculations for the total cost of renting include rent and renters insurance.
Top Ten cities to rent vs. buy:
Rank/City/State/Price: Rent Ratio
1/New York/N.Y./31
2/Seattle/Washington/24
3/Kansas City/Missouri/21
4/San Francisco/California/21
5/Memphis/Tennessee/20
6/Los Angeles/California/20
7/Fort Worth/Texas/19
8/Oakland/California/18
9/Portland/Oregon/18
10/Albuquerque/New Mexico/18
Source: Trulia
Tara-Nicholle Nelson, consumer educator for Trulia, stated, “Although owning a home is relatively more affordable in most cities, market conditions have caused an interesting demographic swap between traditional renters and buyers.”
“For example, lifelong renters are seizing the opportunity to become homeowners while affordability is high. At the same time, a growing number of longtime homeowners are finding themselves tenants — some by choice and others by necessity.”
New Home Sales Increased
March 5, 2011
New home sales increased 17.5 percent in the month of December to a seasonally adjusted annual rate of 329,000 units from a rate of 280,000 units seen in the month November. Economists had believed to see a pace of 300,000 units.
The pending home sales index which is a forward-looking indicator based on signed contracts from the National Association of Realtors reported an increase of 2 percent in the month of December after seeing a 3.1 percent increase in the month of November. On a year-over-year basis, pending sales are down 4.2 percent.
The Standard & Poor’s/Case-Shiller 20-city housing price index on a non-seasonally adjusted basis decreased 1 percent in the month of November after seeing a 1.3 percent fall in the month of October. On a year-over-year basis, prices decreased 1.6 percent when compared with November of 2009.
The gross domestic product, which is the total output of goods and services, produced in the United States announced by the Commerce Department increased at an annual rate of 3.2 percent in the last quarter of 2010. This is after a 2.6 percent of grown seen in the 3rd quarter of 2010.
The consumer confidence index increased to 60.6 in January from an upwardly revision of 53.3 in the month of December. It was the highest level seen since May. The index was benchmarked at 100 in 1985; a year chosen because it was did not show peak or a trough in consumer confidence.
Durable goods orders, which are items that are expected to last three or more years, decreased 2.5 percent in the month of December after seeing a 0.1 percent fall in the month of November. Excluding volatile transportation-related goods, orders posted saw a monthly increase of 0.5 percent.
First claims for unemployment benefits increased by 51,000 to 454,000 for the week that ended on January 22, while continuing claims for the week that ended on January 15 increased by 94,000 to 3.9 million.
Economic Calendar reports upcoming
February 1 – construction spending
February 3 – factory orders
Google Drops Real Estate Listings
February 25, 2011
Google announced it would no longer support real estate listing to its classified listings site on Google Maps.
You will not be able to find foreclosures, for sales, or rental properties via the search function on Google Maps and real estate agents and companies will no longer have the ability to upload their listings to Google Base, which is the company’s classified ads site. This site is being replaced by Google Shopping API’s and will no longer support real estate listings.
In a Google blog post the following was explained, “In part due to low usage, the proliferation of excellent property-search tools on real estate websites, and the infrastructure challenge posed by the impending retirement of the Google Base API, we’ve decided to discontinue the real estate feature within Google Maps on February 10, 2011.”
It went on to explain that those looking for a home can still use, “Google search results to find helpful real estate information and websites” as well as view local businesses, directions and transit times through Google Maps and explore neighborhoods through Google Street View.”
Pete Flint CEO and co-founder of Trulia a property search site stated, “This does not come as a surprise to me. Even with Google’s huge audience, it shows having listing data is clearly not enough to deliver a good real estate search experience and build audience.”
Carter Maslan, Google’s director of product management, at the July 2010 Real Estate Connect conference in San Francisco stated, “We are no more in the real estate business than we are in the cafe or the museum business,” and went on to say, “We view as key … to get (the information) right, but what we really want to do is show it in context.”
Joel Burslem, of real estate marketing and communications firm 1000 Watt Consulting stated on a blog post regarding the decision, “Maintaining a national property database, and, perhaps more importantly, its concurrent accuracy, is a huge challenge that it looks like even Google realized is too big a pill to swallow.”
Inman News columnist Gahlord Dewald said Google’s announcement just asks more questions than it answers.
Dewald said, “For real estate, I don’t have data that supports the idea of humans clicking on maps as a search interface ever was real — the technology vendors of map-based search still don’t have adequate analytics baked in to give us that data. Google, I’m sure, has that data.” “That they couldn’t sustain an interest in the project could mean a lot of things: Maybe Google lacks the imagination to develop a business around the service, maybe people don’t want to use a map as a search interface for real estate, maybe there’s no business there at all.”
In November of 2005, Google launched Google Base. In December 2006, The Houston Association of Realtors added member’s listings to this service. In November 2009, Google added “place pages” to the service, providing all the information Google has regarding a property listing on one page including property details, inspection times, photos, videos, nearby public transit data, and a street view preview.
Inman News columnist Tom Flanagan stated, “This is an interesting move by Google. We saw big changes in leadership last week with Eric (Schmidt), Larry (Page) and Sergey (Brin) shifting their focuses and positions,” and, went on to say, “I suspect more changes are coming. I’d really be surprised if Google completely retired real estate — it’s just too big for them to ignore!”
Hiring Plans a sign of Recovery
February 11, 2011
The United States economic recovery is gaining strength as reported by industry economists as more firms are showing positive higher plans over what was seen in the last ten years.
A survey presented by the National Association for Business Economics showed that economists are more hopeful concerning overall economic growth, the job market, and demand for products and services by several measures that have not been seen since the start of the Recession.
The survey that decisions made by businesses are “being driven by the fundamentals of an improving economy,” stated Shawn DuBravac, an economist with the Consumer Electronics Association who analyzed the findings.
The survey, which is provided quarterly, includes views of 84 economists for private companies and trade groups who are NABE members. The data is compiled by a broad industry group. Many of the results are expressed as Net Rising Index, or NRI, which is the percentage of panelists reporting better outlooks taking away the percentage whose outlook is bleaker.
Economists that saw hiring by their companies increased over the next 6 months was 42 percent with 7 percent expecting lay offs. The NRI of 35 was the highest during the 12 years that the question has been asked.
On the other hand, more layoffs were anticipated in the transportation, utility, information, and communications sectors.
That confidence followed increased hiring by the economists’ firms during the quarter that ended on Dec. 31. Around one-third of those that took the survey said hiring had improved at their companies, compared with only 6 percent who said workers were laid off. The NRI of 28 represented a 10-point increase over the previous quarter.
All major industry groups saw an increase in demand for their products and services, which was the sixth straight quarter for positive results. Demand grew slightly less than in the previous quarter, but has held pretty steady since last spring, explained the NABE.
This survey was conducted from December 17 thru January 5.