3rd Quarter Market Report

Snowy First Half Sparks Active Summer Home Market
Vacation Home Buyers Attracted by Favorable Prices, Interest Rates
Potential homebuyers distracted by record snowfall in the first two quarters of 2011 turned their attention back to the unprecedented inventory of priced-to-sell homes and favorable mortgage interest rates available throughout the Lake Tahoe and Truckee areas during the third quarter, according to a report by the research division of Better Homes and Gardens Mason-McDuffie Real Estate based on an analysis of MLS data.

Sales of existing, single-family detached homes in the Lake Tahoe area rose from 67 in the snowbound second quarter to 89, a 33 percent increase and just four sales below the 93 sales completed in the third quarter of 2010. In the Truckee area, 191 existing homes changed hands in the third quarter, up 28 percent from 149 homes sold in the second quarter and 27 percent from 150 homes sold in last year’s third quarter.
Read Full Report: Tahoe Truckee Market Report

Beyond the Headlines

October 20, 2011
Real Estate News from Around the Country – Information that Might Impact You
Read the full story on these current real estate topics:
- After a rejection
- Slim pickings are latest headache for home sales
- Fannie, Freddie to phase out attorney network in wake of foreclosure scandal
- The 4 percent mortgage – good luck getting one
- Bill would remove penalty for tapping 401(k) to avoid foreclosure
- Next generation of homeowners are freaked out
- Couponing comes to housing
- Young professionals contemplate the rent vs. buy debate
- Supply vs Demand: Why is housing hurting?
View these Hot Topics

Beyond the Headlines

October 2011
Real Estate News from Around the Country – Information that Might Impact You
Read the full story on these current real estate topics:
- U.S. to lower the size of mortgage it will guarantee
- Bipolar housing market: The haves and the have-nots
- New-home sales slide for 4th straight month
- Home prices up in July in 17 cities
- Troubled homeowners beware of “mass joinder” lawsuit invitations
- Troubled homes hanging over U.S. housing market drop
- Consumer confidence ticks up in September
- Title fees are hard to swallow when refinancing mortgage
- Crash in home prices, tight lending blocked 2.3 million refis.
Read These Hot Topics

Beyond the Headlines

September 2011
Real Estate News from Around the Country – Information that Might Impact You
Read the full story on these current real estate topics:
- When income is freelance
- Home prices bounce back, but market still struggles
- Energy-efficient homes seem to sell faster, fetch higher prices
- U.S. considers refinance plan for mortgages
- Consumer confidence lowest in two years
- Number of short sales on the rise
- Generation of homeowners stuck in first houses
- How to rescue the housing market: Foreclosures
- What you should know about the market
Read These Hot Topics

Fed to Keep Rates at Record Lows at Least Through Mid-2013

GMT By Jeannine Aversa and Scott Lanman Aug. 9 (Bloomberg) –

The Federal Reserve pledged for the first time to keep its benchmark interest rate at a record low at least through mid-2013 in a bid to revive the flagging recovery after a worldwide stock rout. The Federal Open Market Committee discussed a range of policy tools to bolster the economy and said it is “prepared to employ these tools as appropriate,” it said in a statement today in Washington. Three members of the FOMC dissented, preferring to maintain the pledge to keep rates low for an “extended period.”

The decision represents the biggest effort since November to spark the U.S. economy and revive confidence while stopping short of initiating a third round of large-scale asset purchases. Chairman Ben S. Bernanke and his colleagues acted after reports showed the economy was slowing and an unprecedented downgrade to the U.S. credit rating sent stocks tumbling from Sydney to New York.

The Fed offered a dimmer view of the economy than it did in the last statement in late June. “Economic growth so far this year has been considerably slower than the committee had expected,” it said. The Fed also said it expects a “somewhat slower pace of recovery over coming quarters,” adding that “downside risks to the economic outlook have increased.” The Fed left its target for the federal funds rate in a range of zero to 0.25 percent, where it’s been since December 2008. It said it will maintain its policy of reinvesting maturing securities without saying for how long. Richard Fisher, president of the Dallas Fed, Charles Plosser of Philadelphia and Narayana Kocherlakota of the Minneapolis Fed all dissented.

Stocks Fall
The Fed’s decision came after Standard & Poor’s unprecedented downgrade of the U.S. credit rating on Aug. 5 sent share prices tumbling on concern a global economic slowdown will deepen. Fitch Ratings and Moody’s Investors Service affirmed their top grades for U.S. debt.

The Standard & Poor’s 500 Index tumbled 6.7 percent yesterday in New York, its biggest decline since December 2008. The drop has wiped out all the gains in stocks since Nov. 3, 2010, when the Fed announced it would buy $600 billion of government bonds, its second round of asset purchases. Treasuries surged yesterday as investors sought the safety of government debt. Yields on 10-year notes fell 22 basis points, or 0.22 percentage point, to 2.32 percent, the least since January 2009.

Europe’s debt woes added to the market turmoil. Central bankers and finance ministers from the Group of Seven nations pledged Aug. 7 to “take all necessary measures to support financial stability and growth.”

European Debt
The next day, the European Central Bank began buying Italian and Spanish bonds in its riskiest attempt yet to battle the continent’s sovereign debt crisis. While U.S. inflation rates have risen, they are still below the Fed’s informal target range of 1.7 to 2 percent. A measure of consumer-price gains, stripping out food and energy, stood at 1.3 percent for the 12 months ending in June. That’s up from 0.9 percent for the 12 months ending December.

Bernanke told Congress on July 13 that the Fed was prepared to buy more Treasury bonds if the economy appeared in danger of stalling or if the threat of deflation looked like it was going to re-emerge, while repeating his forecast for a pickup in growth in the second half of the year. Recent economic data have cast doubt on his outlook. Gross domestic product expanded at a 1.3 percent annual pace in the second quarter, less than forecast by economists, a July 29 government report showed. The economy almost stalled in the prior quarter, growing at a 0.4 percent pace, the weakest three-month period since the recovery began in June 2009.

Deeper Recession
The same report showed that the recession was about 25 percent deeper than previously estimated, leaving GDP short of its 2007 peak and the economy more vulnerable to another contraction. Consumers cut spending in June for the first time in almost two years, the Commerce Department said Aug. 2. “The consumer environment remains very tough,” Michael Polk, chief executive officer of Atlanta-based Newell Rubbermaid Inc., said on a conference call with analysts on July 29. He said a “difficult” U.S. economy was among the reasons the maker of Rubbermaid containers and Sharpie pens had cut its full-year profit and sales forecasts. Hiring has slowed as employers lost confidence in the recovery. Average monthly payroll gains fell to 72,000 in the three months through July, from 215,000 in the prior three months. The jobless rate fell to 9.1 percent in July from 9.2 percent in June as Americans gave up looking for work. “When we have the kind of combination of sub-par growth, stubbornly high unemployment and a big debt overhang, you need low interest rates,” Carmen Reinhart, a senior fellow at the Peterson Institute for International Economics in Washington, said on Aug. 5.  The housing market has also been a drag on growth as sliding home prices cut into consumer confidence and wealth.  Sales of existing homes, the largest portion of the housing market, totaled 4.77 million on an annualized basis in June, a 34 percent drop from their pre-recession peak in September 2005.  The S&P/Case-Shiller index of property values in 20 cities declined 4.5 percent in May from a year earlier, the most in 18 months, and homeownership at 65.9 percent is at its lowest point since 1998, even as affordability is close to a record high.

“We’re still in a market that is clearly bouncing along the bottom on housing and new construction,” Christopher M. Connor, chief executive officer of Sherwin-Williams Co., said on a July 21 conference call. The Cleveland-based company, the largest U.S. paint maker, also cut its full-year profit forecast because of rising raw material costs. Manufacturing, which had been one of the few bright spots in the economy, grew in July at its slowest pace in two years, the Institute for Supply Management said on Aug. 1. The recovery is sputtering just as the existing fiscal stimulus programs expire and the federal government moves toward reducing budget deficits. The debt deal signed by President Barack Obama on Aug. 2 would cut $2.4 trillion or more off budget deficits over 10 years. The expiration of current fiscal stimulus programs will slice 1.5 percentage points off economic growth next year, according to economists at JPMorgan Chase & Co. and Deutsche Bank Securities. Not all companies are suffering. Morton’s Restaurant Group Inc., the Chicago-based operator of 83 upscale steakhouses, said July 28 that second-quarter revenue rose 11 percent, with customers spending more money as business dining and travel increased.