Will 2011 Be a Positive Year for The Housing Market?

The National Association of Realtor's Chief Economist, Lawrence Yun, believes that since home "affordability remains strong" and if "consumer confidence and business spending" increases, we could see a "virtuous cycle" begin as early as next year. What happens if consumer confidence and business spending don't increase? Yun says that we could enter a "vicious cycle" instead! Read on for the entire article, Home Sales Could Enter 'Virtuous Cycle', as printed in Realtor Magazine Online.

Consumer confidence and business spending are key to whether the U.S. housing market will move into a virtuous or a vicious cycle in 2011, NAR Chief Economist Lawrence Yun told a packed audience at the Residential Economic Outlook Forum Friday in New Orleans.

After the downturn, the housing market has clawed its way back to a point of near stability, Yun said, with the pace of new foreclosures easing, sales moving toward historically normal levels and prices on a national basis gaining modestly.

At the same time, affordability remains strong. He said all of the price excesses from the housing bubble have been squeezed out. In San Diego, for example, buyers today would pay $1,564 a month in mortgage payments for a house that at the height of the boom would have cost them $2,833 a month.

The broader economy is also showing positive signs, with businesses enjoying strong profits, sitting on huge cash reserves, and even adding jobs. Yun predicts this positive trend to continue into 2011, with existing home sales reaching 5.5 million units, prices rising a modest 1 percent, and the U.S. gross domestic product increasing to about 2.5 percent.

“We are entering a virtuous cycle,” he said. But for the positive trend to continue, he added, businesses will have to start spending some of their cash to fuel job growth at a far greater pace than they’re doing now. Currently, businesses are adding jobs at a pace of about 100,000 a month. That needs to grow to about 400,000 a month for unemployment to start shrinking.

The scenario will be far more negative if businesses continue to sit on their cash. In that case, sales will fall, inventories will rise, the high rate of foreclosures will resume, and the cost to the federal government of bailing out Fannie Mae and Freddie Mac will surge.

Federal Reserve Governor Thomas Koenig, who shared the dais with Yun, said the Fed’s continued effort to spur the economy, most recently through a $600 billion bond buying program, is understandable given concerns over the slow pace of growth. But the continued subsidization of the market could unleash inflationary forces.

Yun said he sees possible evidence of inflation building, but it’s not visible now because the housing-cost portion of inflation measurements is holding down prices.

—Rob Freedman, REALTOR® Magazine

Now is a great time to buy or sell your Tulsa, OK home! Contact Kelly Howard, McGraw Realtors, 918-230-6341 or www.kellyhowardhomes.com.

Cub Scout Pack 344 Tours Tulsa City Hall

Tulsa City Councilor G.T. Bynum talks to Cub Scout Pack 344 explaining how the Tulsa City government works. 

Posted via email from The Baskin Report

Tulsa Metro Housing Supply Continues to Rise

The Tulsa, OK metro area housing supply has continued to increase. This graph represents the increase in month's supply of inventory. Although recent reports have claimed the Tulsa, Oklahoma real estate market has hit bottom, the increase in supply indicates the bottom has not yet been reached. Tom Allen, a local appraiser, says "When the month's supply is over ten months, prices drop." Darryl Baskin of McGraw Realtors and host of the television and radio programs "The Future of Real Estate," says "This increase in inventory has less to do with the growing supply and more to do with a slowdown in sales. People just haven't felt confident about making a home purchase. Others have had financial changes which keep them from qualifying. Recent elections may help ease consumer's apprehension." However you view the real estate market, Tulsa area home buyers and sellers should know the facts before entering into a contract to sell or buy a home. For additional information, contact the Baskin Real Estate Specialists of McGraw Realotrs at 918-258-2600 or visit www.darrylbaskin.com.

Posted via email from The Baskin Report

New Luxury Home in South Tulsa!

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For more information on this Gorgeous Bixby, OK Luxury Home or for other Tulsa, OK real estate needs, contact Kelly Howard, McGraw Realtors, 918-230-6341 or www.kellyhowardhomes.com.

Could the Economy Sink Even Further?

A recent article posted in Realtor.org, Fed's Aggressive Policy Sparks Critics, discusses the decision announced Wednesday that the Federal Reserve would be buying $600 Billion in Treasure securities.

When the Federal Reserve announced Wednesday that it intended to buy $600 billion in Treasury securities through June, it also signaled that it could make more purchases after that if unemployment remained too high and inflation too low.

But after the announcement many deficit hawks who warned about inflation earlier this year repeated those warnings anew. The Cato Institute, citing a former vice president of the Dallas Fed, said the new program would “sink” the economy.

It’s always possible that the critics are correct and that, this time, inflation really is just around the corner. But there is still no good evidence of it. The better question may be whether the Fed is still behind the curve.

Some economists are optimistic that it has finally found the right balance. Manoj Pradhan, a global economist at Morgan Stanley, pointed out that bond purchase programs lifted growth in Europe and the United States last year—and a broadly similar approach also helped end the Great Depression.

“There are no guarantees,” Pradhan said, “but the historical precedents certainly suggest it will work.”

Others, though, wonder if the program is both too late and too little. “I’m a little disappointed,” said Joseph Gagnon, a former Fed economist who has strongly argued for more action.

The announced pace of bond purchases appears somewhat slower than Fed officials had recently been signaling, Gagnon added, which may explain why interest rates on 30-year bonds actually rose after the Fed announcement.

One thing seems undeniable: the Fed’s task is harder than it would have been six months ago. Businesses and consumers may now wonder if any new signs of recovery are another false start.

Source: The New York Times, Sewell Chan and David Leonhardt 11/03/2010

For your Tulsa, OK real estate needs, contact Kelly Howard, McGraw Realtors, 918-230-6341 or www.kellyhowardhomes.com.

How the Election Might Affect Tulsa Foreclosures

With the changes coming as a result of Tuesday's election, there remains a question about how these changes will affect the national and Tulsa real estate market. According to an article posted in the Wall Street Journal by Robbie Whelan, some of the initial results are:

1. Ten of the 12 state attorneys general on the executive committee heading the foreclosure probe lost their re-election bids and won’t be returning to office. However, Ohio’s Richard Cordray, one of the most outspoken AGs, says the change of watch won’t matter very much.

“The issue is still there. The elections don’t change that. It’s going to need to be addressed, from the industry’s standpoint,” he said. “The 50 state investigation will continue to go forward.”

2. In Florida, voters rejected a proposal to change the state’s constitution to allow voters to decide changes to local master plans. The proposal was rejected by two-thirds of voters.

Source: The Wall Street Journal, Robbie Whelan (11/03/2010)

Tulsa, OK foreclosure rate for September 2010 was 1 in every 467 housing units. For Oklahoma, 1 in every 174 housing units and nationally, 1 in every 371. Compared to national foreclosure rates Oklahoma is mid-range. For Oklahoma rates, Tulsa County has higher rates (Source: Realtytrac.com). Although there is no guarantee how these foreclosure rates will be affected by the election changes, only time will really tell if the changes help the economy and lower foreclosure rates.

Stop your Tulsa Foreclosure, contact Stan of The Baskin Real Estate Specialists at McGraw Realtors, 918-258-2600 or www.stopmytulsaforeclosure.com

To read the original article in the Wall Street Journal, click here.
To read the article in RealtorMag, click here.

Luxury Bixby, OK. Ranch for Sale

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in Bixby, OK.

$2,675,000

5 Bedrooms
6.5 Bathrooms
4 Car Garage

Incomparable Gated & Secluded Estate! Luxurious Private Estate sits on 4 Acres w/up to 100 acres available including a 12-acre pond. Rare & unusual hand carvings & stone accents. Master separate from the 3 guest en suites. Gourmet Kitchen, Saloon & More!

For more information on this Luxury Bixby, OK Ranch for Sale or for all your Tulsa, OK real estate needs, contact Kelly Howard, McGraw Realtors, 918-230-6341 or www.kellyhowardhomes.com