Incline Village is still seeing alot of activity in the 600,000 to 1M price ranges.  2 more homes have gone to contract this week.  The pattern of homes being on the market for extended periods, then selling, then no or non-suitable new listings is the norm in this active market here in Lake Tahoe.  read on for some interesting economic updates.  All the Best,  Tim Lampe

As you will see, longer-term interest rates are rising more than are the shorter-terms, but there really isn't that much movement. It is a strangely quiet period, though the trend for interest rates is definitely up--just a very slow upward movement.

National mortgage applications improved last week. And there is a sense that mortgage applications may have been slow in part because there have been so many all-cash transactions. This is difficult to imagine, yet there is obviously truth to it. Above all, it underscores the fact that the industry is slow to catch up with demand--both lenders and employers are waiting for the economy to assure them that the demand for loans is solid and real, and the need to fill employment rolls is credible. One suspects they will catch up with reality within several months and start lending and hiring more.

The calm in the markets, given the uproar in the wider world, is remarkable. It suggests that confidence in the economy is growing.

 

Weekly National ECONOMIC Commentary- February 10, 2011.  Incline Village Nevada

 

When surveyed about how many new payrolls they expected to see in the January employment report, the nation’s economists agreed that the range would be roughly 55,000 to 200,000. The actual number turned out to be 36,000—and that delighted no one. It was, indeed, rather disappointing, though the weak job growth resulted in part from harsh weather, as well as a lack of optimism among job-seekers. The bitter weather doubtless kept a lot of the unemployed from stepping outside and searching for a job. So the unemployment rate fell to 9%, largely because those not looking for a job fell out of the computations, but there were still suggestions that more of the people who wanted them were actually finding jobs.

 All told, these figures added up to little more than confusion, but there was a bit of good news gleaming in the economic tide pools. For example, the number of new retail jobs created in the month was a strong 28,000—in spite of the weather. And manufacturing jobs, generally with higher pay than most sectors, jumped by 49,000. Unsurprisingly, therefore, wages were also slightly higher last month.

 Finding no summary judgments on the economy’s direction among these figures, we also struggle to gain a clear sense of where the real estate market is headed. The S&P/Case-Shiller index has convinced most analysts that residential real estate is stuck in the mud. But there is this recently uncovered oddity to explain: Nationally, 28% of all real estate sales were all-cash last year.

 What to make of this? Here’s a guess: The heavy-hitters are so convinced that today’s real estate is a bargain (and presumably that prices won’t decline much further) that they are picking up residential properties by writing checks and avoiding the hassle of getting a loan. The Wall Street Journal profiled a buyer in Florida who paid a total of $4 million for three luxury condominiums—raising needed cash by selling a few investments, including a Roy Lichtenstein painting and an Alexander Calder mobile. According to the WSJ  article, he plans to occupy one of the condos with his wife and two dogs, possibly house his son in another, and “the third will house an older dog and guests.”

 What conclusion, if any, can we reach from this odd tale? The banks are way behind the curve here, it seems. They could be—and probably will be, relatively soon—writing very profitable, strong loans that they’re now taking a pass on. Further, employers are behind the curve when it comes to hiring. It’s a time when they could be cherry-picking their way to a new, fuller staff—yet they continue to wait for some mystical sign here.

 A time to buy real estate. A time to employ able workers. It all sounds like the anxious moments before the recovery takes off solidly.

 

 

 

KEY INDICATORS [2/8/11]

 

Gold $1366.10/ounce [up]

Crude Oil(Brent) $100.07/brl

[down]

U.S. Dollar to…

    Euro .7380 [up very slightly]

    Japanese Yen 81.92 [up]

6-mo Treasury Bill Yield 0.17%

10-yr Treasury Note Yield 3.65%

[6-month up 1 bp, 10-yr up 22 bps]

11th Dist Cost of Funds 1.508%[-]

30-yr Fixed-rate Mortgage 5.17%

15-yr Fixed-rate Mortgage 4.48%

1-yr ARM 3.77%

[HSH average includes jumbo rates: 30-yr up 5 bps; 15-yr up 1 bp; 1-yr ARM up 6 bps]

Freddie Mac weekly average rate

    4.81% [up 1 bp]

 

Mortgage Bankers Association Mortgage Applications Index

week ending 1/28

  Overall

    Up 11.3%; down 12.9%

the week prior

  Purchase Money Loans

    Up 9.5%; down 8.7%

            the week prior

  Refinancing Loans

    Up 11.7%; Down 15.3%

the week prior

 

Jobless Claims 1/29

    415,000 – prior week 457,000 (rev) – Continuing claims up 84,000 to 3.925 million

 

Employment Report January

    36,000 new nonfarm payrolls – unemployment down to 9%