By Luke Mullins Luke Mullins –
Wed Sep 2, 4:51 pm ET
Housing market optimists picked up another encouraging data point Tuesday, when a new report on the residential real estate market came in stronger than expected. The National Association of Realtors' pending home sales index for July was 12 percent above year-earlier levels, hitting its highest point since June 2007. "The increase reported for pending home sales was the sixth consecutive gain, suggesting firmer figures for existing home sales in the next month or two," economists at Goldman Sachs said in a report.
Here are five things you need to know about the July pending home sales report:
1. Lower prices, cheap mortgage rates: Even with the unemployment rate sitting at well above 9 percent, the nation's beleaguered housing market is handing would-be buyers some compelling reasons to get off the sidelines. "The combination of low home prices and low mortgage rates--for the creditworthy--is pulling people back into the market," Ian Shepherdson, chief U.S. economist at High Frequency Economics, said in a report.
2. $8,000 tax credit: The $8,000 first-time home buyer tax credit--which the Obama administration included in its massive stimulus package--has also helped. "NAR estimates that about 1.8 to 2.0 million first-time buyers will take advantage of the $8,000 tax credit this year," the trade group said in its press release. "With approximately 350,000 additional sales that would not have taken place without the credit."
3. Looming expiration: To qualify for the credit, however, home buyers must make their purchase before Dec. 1, 2009. "[Buyers] must complete the transaction by November 30 to qualify for the credit," NAR said. "Contracts signed but not completed by that date will not be eligible--it is taking approximately two months to complete home sales in the current market."
Charles McMillan, the president of NAR and a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, wants lawmakers to extend the benefit. "We're encouraging Congress to extend the tax credit into 2010, and to expand it to all buyers of primary residences," McMillan said in NAR's press release. But if Congress doesn't move to do so, the expiration of the tax credit could certainly "take some of the wind out of the market's sails this fall," says Mike Larson of Weiss Research.
4. Additional supply? Despite the optimistic housing data, real estate prices could face continued downward pressure from additional inventory. "The influx of distressed property into the market promises to keep supply levels elevated over the next 12 to 18 months," Larson says. Shepherdson, meanwhile, cautioned that homeowners may take this opportunity to dump more properties onto the market. "Beware a rise in supply as frustrated would-be sellers see their chance," he said.
5. 'Undeniable' stabilization: Nevertheless, Larson says the most recent pending home sales report represents further evidence that the housing market is on the mend. "The overall trend toward stabilization is undeniable at this point," he says.
Wednesday, September 2, 2009
Meltdown 101: Home heating costs this winter
MARK WILLIAMS
The Associated Press
Heating costs this winter figure to be cheaper for much of the country than they were a year ago, thanks to a glut of natural gas and fuel oil and a recession that's pushing down demand.
Does this mean you should lock in a rate now , or wait for prices to keep dropping?
Here are some questions and answers about heating costs for this winter.
Q: Where are prices compared with a year ago?
A: Natural gas prices are down about 80 percent and heating oil prices are half what they were a year ago, both on the New York Mercantile Exchange.
Q: So exactly how much will I save?
A: There are plenty of factors that go into figuring how much it will cost to heat your home this winter. The actual cost of natural gas and heating oil typically make up about two-thirds to three-quarters of the total bill. Consumption, of course, also is driven by how cold it gets this winter, how big your house is and how comfy you want the place to be when grandma comes for Christmas.
Of the 111 million households in the U.S., about 8.5 million use heating oil as their main heating fuel, and most live in the Northeast.
The current average price for heating oil in New York, for example, is $2.60 a gallon, nearly 40 percent lower than the year-ago price of $4.20. In Vermont, customers of Owner Services Inc. are paying about $2.35 a gallon, down about $2 a gallon from a year ago.
A consumer using 1,000 gallons of fuel during winter figures to save $1,600 this winter in New York compared with a year ago, based on current spot prices.
But there are some caveats. Most people fill their tanks three or four times during the winter. You are vulnerable to changes in spot prices if you do not lock in to a fixed contract that guarantees a price for a specific period.
As far as gas prices go, how much you will pay depends on the strategies used by the distributor that provides gas for the home.
Many use a portfolio approach where gas is bought under a mix of short- and long-term contracts, said Chris McGill of the American Gas Association. Many companies also use financial tools such as hedges to help keep prices under control.
"There is always a rolling price, and that's what helps mitigate peaks and valley on the pricing side," he said.
That means you probably will not get the full benefit of the low prices that exist on the markets now, but, on the other hand, you did not pay the highest price when prices peaked last summer.
Columbia Gas of Ohio, which adjusts its prices monthly, has said its prices for September will be half of what they were in September 2008.
Q: Given that prices are so low right now, does it make sense to lock in a price if I can?
A: It depends. If you like the security of knowing how much you will pay for a fixed period, go for it. If you think prices have further to fall, don't.
Chris Keyser, president of Owner Services, said more customers want a fixed oil contract when prices are going up than when prices fall.
And historically that makes sense, he said. When a recession follows a big price spike , as has happened recently , prices are usually flat or slightly down for 18 months or so, so people might not be as concerned about locking during that stretch.
About 40 percent of his 5,500 customers in Vermont have locked into oil prices for this year, down from 60 percent last year when customers feared that prices were headed much higher.
About 35 million of the 60 million homes that heat with gas have access to customer choice programs that could give them a chance to lock in a price for a set period such as a year or two, but only about 13 percent of those homes use them, according to the Energy Information Administration.
Otherwise, prices those customers pay will adjust at some fixed interval, such as monthly or quarterly.
Q: Maybe the better question to ask then is how long will prices stay low?
A: For the foreseeable future. Supplies of heating oil are at their highest level since the start of President Ronald Reagan's second term and the heating season does not really start for another two months, according to oil analyst and trader Stephen Schork.
There is so much natural gas in storage already that producers are starting to have a hard time finding places to store it.
Q: Could that change?
A: Sure. A strong hurricane could devastate the natural gas producing region in the Gulf of Mexico or a severely cold and early winter could lead to a big draw on supplies.
But either scenario is unlikely, and even if it happens, it may not matter anyway. Natural gas production is not so dependent on the Gulf anymore and the early forecasts are calling for a moderate winter.
And again, supplies remain more than ample , even if the recession is over, as many economists suspect, demand remains weak.
Q: What if do not heat my home with gas or oil?
A: Heating costs may come down if you warm your home with electricity, but there are a bunch of variables, such as whether you have a choice as to where you get your electricity and how much your utility relies on gas. At the same time, electric utilities have been raising rates to cover costs for new power plants and pollution controls.
The Associated Press
Heating costs this winter figure to be cheaper for much of the country than they were a year ago, thanks to a glut of natural gas and fuel oil and a recession that's pushing down demand.
Does this mean you should lock in a rate now , or wait for prices to keep dropping?
Here are some questions and answers about heating costs for this winter.
Q: Where are prices compared with a year ago?
A: Natural gas prices are down about 80 percent and heating oil prices are half what they were a year ago, both on the New York Mercantile Exchange.
Q: So exactly how much will I save?
A: There are plenty of factors that go into figuring how much it will cost to heat your home this winter. The actual cost of natural gas and heating oil typically make up about two-thirds to three-quarters of the total bill. Consumption, of course, also is driven by how cold it gets this winter, how big your house is and how comfy you want the place to be when grandma comes for Christmas.
Of the 111 million households in the U.S., about 8.5 million use heating oil as their main heating fuel, and most live in the Northeast.
The current average price for heating oil in New York, for example, is $2.60 a gallon, nearly 40 percent lower than the year-ago price of $4.20. In Vermont, customers of Owner Services Inc. are paying about $2.35 a gallon, down about $2 a gallon from a year ago.
A consumer using 1,000 gallons of fuel during winter figures to save $1,600 this winter in New York compared with a year ago, based on current spot prices.
But there are some caveats. Most people fill their tanks three or four times during the winter. You are vulnerable to changes in spot prices if you do not lock in to a fixed contract that guarantees a price for a specific period.
As far as gas prices go, how much you will pay depends on the strategies used by the distributor that provides gas for the home.
Many use a portfolio approach where gas is bought under a mix of short- and long-term contracts, said Chris McGill of the American Gas Association. Many companies also use financial tools such as hedges to help keep prices under control.
"There is always a rolling price, and that's what helps mitigate peaks and valley on the pricing side," he said.
That means you probably will not get the full benefit of the low prices that exist on the markets now, but, on the other hand, you did not pay the highest price when prices peaked last summer.
Columbia Gas of Ohio, which adjusts its prices monthly, has said its prices for September will be half of what they were in September 2008.
Q: Given that prices are so low right now, does it make sense to lock in a price if I can?
A: It depends. If you like the security of knowing how much you will pay for a fixed period, go for it. If you think prices have further to fall, don't.
Chris Keyser, president of Owner Services, said more customers want a fixed oil contract when prices are going up than when prices fall.
And historically that makes sense, he said. When a recession follows a big price spike , as has happened recently , prices are usually flat or slightly down for 18 months or so, so people might not be as concerned about locking during that stretch.
About 40 percent of his 5,500 customers in Vermont have locked into oil prices for this year, down from 60 percent last year when customers feared that prices were headed much higher.
About 35 million of the 60 million homes that heat with gas have access to customer choice programs that could give them a chance to lock in a price for a set period such as a year or two, but only about 13 percent of those homes use them, according to the Energy Information Administration.
Otherwise, prices those customers pay will adjust at some fixed interval, such as monthly or quarterly.
Q: Maybe the better question to ask then is how long will prices stay low?
A: For the foreseeable future. Supplies of heating oil are at their highest level since the start of President Ronald Reagan's second term and the heating season does not really start for another two months, according to oil analyst and trader Stephen Schork.
There is so much natural gas in storage already that producers are starting to have a hard time finding places to store it.
Q: Could that change?
A: Sure. A strong hurricane could devastate the natural gas producing region in the Gulf of Mexico or a severely cold and early winter could lead to a big draw on supplies.
But either scenario is unlikely, and even if it happens, it may not matter anyway. Natural gas production is not so dependent on the Gulf anymore and the early forecasts are calling for a moderate winter.
And again, supplies remain more than ample , even if the recession is over, as many economists suspect, demand remains weak.
Q: What if do not heat my home with gas or oil?
A: Heating costs may come down if you warm your home with electricity, but there are a bunch of variables, such as whether you have a choice as to where you get your electricity and how much your utility relies on gas. At the same time, electric utilities have been raising rates to cover costs for new power plants and pollution controls.
Stimulus saves construction jobs: House panel
Wed, Sep 02 13:49 PM EDT
WASHINGTON (Reuters) - The number of jobs created or saved by infrastructure projects funded by the U.S. economic stimulus plan increased by more than 50 percent in July from June, according to a report on Wednesday.
By the end of July, 77,470 jobs had been "created or sustained" by water, highway and public transportation projects, compared to slightly less than 50,000 jobs at the end of June, said the report from a House of Representatives committee.
A single state, Illinois, accounted for nearly a fifth of the total by creating or sustaining 15,388 jobs, according to the House Transportation and Infrastructure Committee.
The Midwestern state could use the boost. Illinois had an unemployment rate of 10.4 percent in July, well above the national rate of 9.4 percent, according to the Labor Department.
California, which was given a large share of the infrastructure funds included in the $787 billion stimulus plan, tallied 10,146 jobs. There have been 5,953 jobs created or sustained in Texas, which also received a significant portion of the transportation earmarks.
Wyoming ranked first when the committee considered the number of projects states had out to bid, under contract and underway.
Last month, the committee lashed out at Florida for delays in spending the money. But according to Wednesday's rankings, the state is now moving faster than 17 others and Hawaii is slowest in processing projects.
The Associated General Contractors of America said on Monday that, while the states may be starting work, cities are lagging.
"It is difficult to understand why more communities aren't moving to put their stimulus funds to work while they are experiencing these kinds of job losses," Stephen Sandherr, the association's chief executive officer, said in a statement.
The trade group analyzed city employment data and found that construction employment declined in 319 of the largest U.S. metropolitan areas in July, while it increased in only 11 areas. The Labor Department reported in August that the construction industry shed 76,000 jobs in July.
According to a federal report on construction spending released on Tuesday, money put into public capital works dropped 0.7 percent that month.
After rising 3.1 percent in June, state and local construction spending fell 0.8 percent. Highway and street spending fell 1.0 percent and transportation spending was off 0.4 percent. Educational spending was down 1.3 percent from June.
(Reporting by Lisa Lambert; Editing by Kenneth Barry)
WASHINGTON (Reuters) - The number of jobs created or saved by infrastructure projects funded by the U.S. economic stimulus plan increased by more than 50 percent in July from June, according to a report on Wednesday.
By the end of July, 77,470 jobs had been "created or sustained" by water, highway and public transportation projects, compared to slightly less than 50,000 jobs at the end of June, said the report from a House of Representatives committee.
A single state, Illinois, accounted for nearly a fifth of the total by creating or sustaining 15,388 jobs, according to the House Transportation and Infrastructure Committee.
The Midwestern state could use the boost. Illinois had an unemployment rate of 10.4 percent in July, well above the national rate of 9.4 percent, according to the Labor Department.
California, which was given a large share of the infrastructure funds included in the $787 billion stimulus plan, tallied 10,146 jobs. There have been 5,953 jobs created or sustained in Texas, which also received a significant portion of the transportation earmarks.
Wyoming ranked first when the committee considered the number of projects states had out to bid, under contract and underway.
Last month, the committee lashed out at Florida for delays in spending the money. But according to Wednesday's rankings, the state is now moving faster than 17 others and Hawaii is slowest in processing projects.
The Associated General Contractors of America said on Monday that, while the states may be starting work, cities are lagging.
"It is difficult to understand why more communities aren't moving to put their stimulus funds to work while they are experiencing these kinds of job losses," Stephen Sandherr, the association's chief executive officer, said in a statement.
The trade group analyzed city employment data and found that construction employment declined in 319 of the largest U.S. metropolitan areas in July, while it increased in only 11 areas. The Labor Department reported in August that the construction industry shed 76,000 jobs in July.
According to a federal report on construction spending released on Tuesday, money put into public capital works dropped 0.7 percent that month.
After rising 3.1 percent in June, state and local construction spending fell 0.8 percent. Highway and street spending fell 1.0 percent and transportation spending was off 0.4 percent. Educational spending was down 1.3 percent from June.
(Reporting by Lisa Lambert; Editing by Kenneth Barry)
The New Business Boon: Social Media Marketing
Linda Fanaras,
Millennium Integrated Marketing
Social media has revolutionized the digital world. Originally designed to help people connect and build online communities, social media has evolved to become an integral business marketing strategy.
Social media marketing produces leads, increases website traffic and awareness, and promotes new business partnerships. According to Michael Stelzner's Social Media Marketing Industry Report: How Marketers Are Using Social Media to Grow Their Businesses (March 2009), 81% of all marketers surveyed reported their social media efforts have generated exposure for their businesses.
By using social media tools like blogging, social networks, and social bookmarking, real estate and construction professionals can interact with considerably more people than through their websites alone. Professionals should focus online marketing efforts on producing quality content to engage participants, serve as a valuable resource, and build relationships. Content can be posted simultaneously on business websites, blogs, and branded profile pages on social media sites like Facebook, Twitter, and LinkedIn.
If agents harness social media to provide assistance and education, business will follow. According to realestateblackbook.com's Peter Kolat, "...you need to be a servant - help people out, provide great advice and minimize the amount of selling. People use social media to get away from selling" (August 4, 2009).
Social media can be a powerful medium when used as part of an integrated marketing strategy. When combined with online efforts like search engine optimization and ad placement, social media marketing can transform an agent's web presence and increase lead generation and sales figures.
Offline strategies, including press releases, direct mail, advertising, and sponsorships, should also be considered as part of a comprehensive marketing plan.
An integrated marketing firm can design and execute the most effective marketing plan, strategy, and policies to ensure both online and offline efforts deliver the laser-sharp messaging that will generate real estate leads and increase business.
Millennium Integrated Marketing
Social media has revolutionized the digital world. Originally designed to help people connect and build online communities, social media has evolved to become an integral business marketing strategy.
Social media marketing produces leads, increases website traffic and awareness, and promotes new business partnerships. According to Michael Stelzner's Social Media Marketing Industry Report: How Marketers Are Using Social Media to Grow Their Businesses (March 2009), 81% of all marketers surveyed reported their social media efforts have generated exposure for their businesses.
By using social media tools like blogging, social networks, and social bookmarking, real estate and construction professionals can interact with considerably more people than through their websites alone. Professionals should focus online marketing efforts on producing quality content to engage participants, serve as a valuable resource, and build relationships. Content can be posted simultaneously on business websites, blogs, and branded profile pages on social media sites like Facebook, Twitter, and LinkedIn.
If agents harness social media to provide assistance and education, business will follow. According to realestateblackbook.com's Peter Kolat, "...you need to be a servant - help people out, provide great advice and minimize the amount of selling. People use social media to get away from selling" (August 4, 2009).
Social media can be a powerful medium when used as part of an integrated marketing strategy. When combined with online efforts like search engine optimization and ad placement, social media marketing can transform an agent's web presence and increase lead generation and sales figures.
Offline strategies, including press releases, direct mail, advertising, and sponsorships, should also be considered as part of a comprehensive marketing plan.
An integrated marketing firm can design and execute the most effective marketing plan, strategy, and policies to ensure both online and offline efforts deliver the laser-sharp messaging that will generate real estate leads and increase business.
In climate of good news, some argue housing crisis will continue
September 02, 2009 06:30PM
The shortage of good news in the housing market seems to have faded -- Toll Brothers, K. Hovnanian and KB Home, among other large U.S. builders have seen their share values spike, while figures on home starts have climbed for the last five months consecutively, according to CNN Money.
Even California, which was one of the states hit hardest by the housing crisis, has seen its home prices climb. But some financial analysts, such as real estate researcher Mark Hanson, founder and managing director at Mark Hanson Advisors, believe that this current housing climate is not recovery, but the calm before the storm. Hanson argues that the crisis was one created over a decade of bad credit decisions and that solving that situation will take far longer than people expect. "We're entering the phase where the homeowner has to earn his way out of this mess," Hanson said. "This summer is shaping up as the gateway into the next move down." [CNNMoney]
The shortage of good news in the housing market seems to have faded -- Toll Brothers, K. Hovnanian and KB Home, among other large U.S. builders have seen their share values spike, while figures on home starts have climbed for the last five months consecutively, according to CNN Money.
Even California, which was one of the states hit hardest by the housing crisis, has seen its home prices climb. But some financial analysts, such as real estate researcher Mark Hanson, founder and managing director at Mark Hanson Advisors, believe that this current housing climate is not recovery, but the calm before the storm. Hanson argues that the crisis was one created over a decade of bad credit decisions and that solving that situation will take far longer than people expect. "We're entering the phase where the homeowner has to earn his way out of this mess," Hanson said. "This summer is shaping up as the gateway into the next move down." [CNNMoney]
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