Live on the Red Line - Real Estate

Federal Reserve: Recession Ending, Rates Left Alone

The Federal Reserve ended its policy-making meeting Wednesday with the declaration that the recession is ending and it would move toward more normal policies.

The Fed said, “Economic activity is leveling out.” It added that it expected inflation would remain “subdued for some time.”

The Fed said it will keep the short-term key interest rate near zero, but it will end its program to buy $300 billion worth of Treasury bonds by the end of October. Buying bonds was one of the Fed’s efforts to drive down the cost of home mortgages.

“In a way, it’s more of a thumbs-up than if they had said they were continuing the Treasury-buying,” said Edward McKelvey, an economist at Goldman Sachs. “They’re saying that things are going according to plan, and that the policy is O.K.”

Source: The New York Times, Edmund L. Andrews (08/12/2009)

New Stimulus Package Signed Into Law

President Obama signed the American Recovery and Reinvestment Act into law Tuesday afternoon. The $787 billion plan is designed to stimulate consumer spending and create jobs, in order to help families recover and prosper.

Realizing that an economic recovery is contingent upon improvements in the housing market, the package includes provisions that will help attract first-time buyers, reduce inventory, stabilize home values and improve liquidity in the overall mortgage market.

The bill specifically helps real estate in the following ways:

• Increases the first-time homebuyer tax credit to $8,000 and eliminates the repayment requirement.

• Reinstates the 2008 higher loan limits for FHA, Fannie Mae and Freddie Mac.

Both provisions were championed by the National Association of Realtors (NAR), which estimates that the new version of the homebuyer tax credit could stimulate up to 300,000 additional home sales.

New Housing Bill...more info

As expected, the President today signed the Housing and Economic Recovery Act of 2008 in to law. Thanks to our leadership on this issue, I am please to report that this bill includes the tax credit we lobbied hard to make a reality.

 

The passing of this legislation is great news not only for us as real estate professionals but also for the homebuyers and sellers we serve. This new law will help bolster the housing market and keep us on the path to recovery by providing:

 

·         A homebuyer tax credit for first-time buyers;

·         Permanently increased loan limits;

·         Assistance for more than 400,000 homeowners at risk of foreclosure;

·         The addition of a standard deduction for real property taxes;

·         Financial backing for Fannie Mae and Freddie Mac

 

As I told you several weeks ago, I remain convinced that we have reached the bottom of the market and will begin to see gradual improvement. Today’s passing of the new housing bill only strengthens my confidence that we are turning a corner.

The Housing & Economic Recovery Act of 2008

Today, President Bush signed H.R. 3221, the “Housing and Economic Recovery Act of 2008” into law. The bill was passed by the House of Representatives in a 272-152 vote and approved by the Senate in a 72-13 vote.

According to the Wall Street Journal, lawmakers have described the bill as the "most important piece of housing legislation in a generation." Intended to stabilize the housing market, the bill includes long-sought reforms for the Federal Housing Administration, a tax credit for homebuyers, nearly $4 billion in grants to cities and states to buy and rehabilitate foreclosed homes and a Treasury Department proposal to help restore confidence in Fannie Mae and Freddie Mac.

Lawmakers are already pressing regulators and lenders to prepare now so the program can begin without delay when it goes into effect October 1.

Report: Downtown D.C.'s economy stays strong in 2007

D.C.'s downtown has the second-highest office rental rates in the U.S., according to the Downtown D.C. Business Improvement District's annual report.

Class A office rental rates in the BID are second only to midtown Manhattan, at $59 per square foot.

The BID covers 138 blocks from Massachusetts Avenue on the north to Constitution Avenue on the south and from Louisiana Avenue on the east to 16th Street on the west -- an area that generates $775 million in revenue per year for city.

Other findings in the report include:

-- Visitor attendance hit an all-time high of 9.5 million, up 470,000 visitors from 2006.

-- Museum visitors increased from 3.9 to 4.2 million.

-- The downtown BID held 6 percent of the jobs, 12 percent of the hotel rooms and 50 percent of the professional sports teams in the region at the end of 2007.

-- The area added 5,000 jobs last year and is projected to add 2,000 to 4,000 jobs each year until full build-out is reached in 2015.

-- Its hotels boasted a 76 percent occupancy rate, up from 72 percent in 2006.

-- From 1997 to 2007, some $8.6 billion was invested in the area's development, reducing the number of surface parking lots and development sites from 115 to 19.

-- Last year 500 residents moved in, creating at total of 8,400 residents in the area.

-- Metrorail ridership rose to 102,000 per weekday, up 2,000 riders per day from 2006.

Report: D.C. area's economy remains strong, despite national slowdown

The national economic slowdown that began in 2007 did little to hurt the Washington area's fiscal health, according to a new report issued Wednesday by the Greater Washington Initiative.

The federal government continued to provide strength to the local economy in 2007, spending $62 billion in the region, according to the report. That is up from about $30.5 billion in 2000 and represents an average growth rate of about 10 percent annually, according to GWI, which promotes regional economic development and is an arm of the Greater Washington Board of Trade.

From 1997 to 2007, the Washington area added 721,000 new jobs, the second-highest growth among major metro areas behind New York, the report said. The professional and business services sector is the Washington area's largest industry and accounts for nearly 23 percent of local jobs.

"This report calls attention to our region's story because we are the place for business," said Sam Schreiber, chairman of GWI, in a statement. "Greater Washington's economy is strong, diverse and resilient, our work force is highly-educated and we have the highest median household income in the nation. This is where business thrives."

In 2006, according to the most recent data available, 21.2 percent of the Washington area's residents aged 25 or older held a graduate or professional degree. That's the highest ratio in the country, according to GWI.

Also using 2006 data, the Washington area's median household income of $79,500 was tops in the nation. There were 11 counties in the region that had household incomes ranked in the top 25 in the country, including Fairfax County, which led the nation with a median household income of $100,300.

Survey: D.C. area companies plan to hire more in third quarter

A new survey from staffing company Manpower Inc. finds that U.S. employers are projecting a slight decline in hiring nationwide in the third quarter of this year. The outlook for Washington business is not so glum. Manpower Inc. (NYSE: MAN) found 26 percent of the employers expect to increase their work forces during the July through September period, while 10 percent expect to scale back their payrolls. Fifty-eight percent expect no change in the hiring pace, and 6 percent are undecided about their hiring plans. The Washington area's employment outlook is rated the third best in the country, according to Manpower. Between July and December, 57 percent of the D.C.-area companies interviewed expect to hire more people. Five percent expect to reduce payrolls and another 25 percent expect to maintain their current staff levels.

In Maryland, Manpower expects 10 percent of companies to hire and 33 percent indicated expansion plans in Prince George's County. Fairfax is expecting to see increases at 13 percent of companies surveyed and in Arlington 27 percent of companies there taking on new people. The quarterly survey covered 14,000 employers to measure the difference between employers saying they plan to add jobs and those planning to cut them.

Washington ranks high for young professionals

Washington ranks third in the nation for best job prospects for young adults, according to a new study.

Despite Washington's high cost of living, paychecks for workers in their 20s and 30s are among the best in the nation, according to the report from Bizjournals.com. It says 17 percent of Washington householders under 25 earn $75,000 a year or more.

The report ranks Raleigh, N.C., No. 1 on the list of cities with the best job prospects for young workers. It is the only market to finish in the top 10 in three key categories: population growth, job growth and the percentage of young adults with college degrees.

Austin ranked No. 2, with 29 percent of its residents between 18 and 34, the highest concentration of young adults in any major metro.

Las Vegas and Phoenix rounded out the top five cities for young professionals, according to the Bizjournals study, citing job growth and low unemployment.

_{Washington Business Journal}

Unemployment up in D.C. area

The Washington area maintained one of the nation’s lowest jobless rates in May, but unemployment rose sharply in the region compared to the same period in 2007.

The region’s unemployment rate in May was 3.5 percent. Despite adding the fifth-most jobs in May among major metro areas in the U.S., the jobless rate spiked from just 2.8 percent in May 2007, according to the U.S. Bureau of Labor Statistics. The District’s unemployment rate in May was 6.5 percent, up from 5.4 percent in May 2007.

The Washington area’s labor force grew by 26,500 jobs in May and is still faring much better than most regions in the U.S. Of the 49 metro areas with populations of at least 1 million, the Washington area was surpassed only by the New Orleans region, which had a 3.3 percent jobless rate in May.

Unemployment rates were higher in May on an annual basis in 328 of country’s 369 metro areas. Nationally, unemployment in May was 5.2 percent, up from 4.3 percent in May 2007.

Among the metropolitan subdivisions for labor markets, the Bethesda-Frederick-Gaithersburg area had the lowest unemployment rate in the country in May, at 3 percent.

_{Washington Business Journal - by Joe Coombs Senior Staff Reporter}

New Housing Statistics...Good Info

According to the Census Bureaus’ Characteristics of New Housing report for 2007, the average square footage of homes is currently at a historic high. On average, a completed single-family home had 2,521 square-feet, up 2.1 percent from 2,469 square-feet in 2006. Additionally, the report provides characteristics on indoor and outdoor housing features. Data from this report gives insight into current trends to better understand today’s buyer.

Home-size findings from the report include:

• The average square footage of new homes completed has grown about 46.6 percent since 1977, when the average was 1,720 square-feet.
• About 26 percent of all new single-family homes completed in 2007 had 3,000 or more square-feet of space, up from 24 percent in 2006 and 11 percent in 1988.
• The percentage of new single-family completed with 1,200 square-feet or less of floor area shrank from 25 percent in 1973 to 4 percent in 2007.

Housing characteristics of single-family, newly-completed homes include:

• In homes with 4 or more bedrooms, over half had 3 bathrooms or more.
• Across the country, half of all homes had at least one fireplace.
• 90 percent of all homes had air conditioning.
• 67 percent of all new homes used gas as the primary source of heating fuel.
• At 32 percent, vinyl siding is the most commonly used material for the exterior of a home.