“The decade that just ended is clearly the warmest decade on record. Every decade since the 1960s clearly has been warmer than the one before.” - Gavin Schmidt, director of NASA’s Goddard Institute for Space Studies in New York. The past decade had eight of the 10 hottest years on record.
DID YOU KNOW? The U.S. economy’s two most interest-sensitive sectors, construction, and durable goods manufacturing fell to 10% of national output in 2018 from 20% in 1967. (WSJ)
DID YOU KNOW? A penthouse at the Four Seasons Hotel & Private Residences One Dalton Street in Boston fetched $34 million, coming in just shy of the most expensive home sale in the city’s history: a penthouse at the Millennium Tower that sold for $35 million in 2016. (Mansion)
DID YOU KNOW? Borrowers over 65 account for roughly 10% of all mortgages originated annually, according to reports by the Federal Housing Finance Agency. (WSJ)
DID YOU KNOW? If you want to get a better idea of the value of some home improvement items, check THIS out. (Thanks Peter Monti for sending!)
DID YOU KNOW? According to a 2018 report from the Pew Research Center, 19% of American adults live in “upper-income households.” The median income of that group was $187,872 in 2016. The share of U.S. adults considered upper-class varies depending on where you live, Pew noted: In affluent metropolitan areas, it’s much higher than 19%. The metropolitan areas with the largest shares of adults in upper-income households are mostly in the coastal areas of the Northeast and California and tend to be in high-tech corridors, such as Boston-Cambridge-Newton, MA-NH, or in financial and commercial centers, such as Hartford-West Hartford-East Hartford, CT. The metro with the highest share was San Jose-Sunnyvale-Santa Clara, CA, where 32% of adults were considered upper-income. (CNBC)
"Narratives that can periodically surge into epidemics are capable of changing the economy’s direction or of turning small booms and recessions into big ones. The probability that a recession will come soon — or be severe when it does — depends in part on the state of ever-changing popular narratives about the economy. These are stories that provide a framework for piecing together the seemingly random bits of information that one picks up from friends, the news or social media." - Robert Schiller, NYT
DID YOU KNOW? Here are some interesting stats from the NAPLES, Florida area via NABOR (Naples Area Board of Realtors) (Thanks to Yasmin Saad).
* Collier County Florida 2017 Population: 372,880
* # of licensed brokers/agents who are members: Brokers: 689, Agents: 6,375
* 96% of users logged in at least once to the SunshineMLS in the last 12 months.
* # of homessold in the last 12 months (buyer or seller side): 6,574 Single Family homes closed had a Naples agent on the Listing Side
914 Land sales closed that had a Naples agent on the Listing Side
* Total number of sales in the last 12 months: 14,130 closed.
DID YOU KNOW? Lower interest rates, and especially a flat yield curve - short-term rates similar to long-term rates - are very tough for banks because they cannot make that interest rate spread on mortgages. Riskier loans may or may not be a source of alternative profits. Banks could take the “easy road” by restricting lending as margins are squeezed. Some could even follow the lead of JPMorgan, which is now selling loans at a profit instead of lending. In the year through August, JP Morgan slashed its loan portfolio by $27.7 billion. (NY POST)
DID YOU KNOW? Citigroup, Goldman Sachs, Wells Fargo and JPMorgan Chase over the past year have restarted or expanded the business of spinning fresh pools of mortgages into securities. They are adding a jolt of energy to efforts to revive the so-called private-label market for mortgage bonds, which virtually disappeared after it blew up during the financial crisis of 2008. Smaller operators have long tried, but mostly failed, to rebuild what was once among the most significant businesses on Wall Street. In 2018 around $70 billion of mortgages ended up in private-label mortgage bonds, according to the Urban Institute. Though that is far below a peak of more than $1 trillion in pre-crisis years, it is the most since 2007. (WSJ)
"Now we have a new data revolution that is much bigger. Google Ngrams is one part of this explosion of big data that gives analysts, researchers and quantitative hedge funds the ability to see nearly real-time data about foot traffic in high-street retailers or mentions of a certain brand on social media." - Robert Shiller (FN)
DID YOU KNOW? Oil prices surged close to 10% after a major attack on Saudi Arabian refineries over the weekend. Why does this matter? The USA is still highly reliant oil. The average American spends about $2,000 per year on gas. A surge in oil and gas prices is the equivalent of a tax on the US consumer.
DID YOU KNOW? The Solar Energy Industries Association forecast 17% growth this year to 12.6 gigawatts in its quarterly joint report with consultants Wood Mackenzie Power & Renewables. That’s down from a forecast of 25% growth earlier this year. However, the report raised the 5-year growth forecast by 6.7 gigawatts, citing strong solar commitment from utilities. The pipeline of contracted large-scale installations for utilities stands at a record 37.9 gigawatts or roughly half the level of solar currently installed in the USA. Compared with 2018, residential system prices this year are 6.8% lower while utility systems are between 10 - 11.4% cheaper. If utility companies see value in solar, homeowners should too? (Reuters)
DID YOU KNOW? As of yesterday afternoon, there is a 65.8% chance that the Federal Reserve will cut its benchmark overnight lending rate by a quarter of a percentage point to a range of 1.75% to 2% tomorrow.
‘I’m bullish on U.S. businesses, global businesses. We’re not in some defensive posture where we’re mostly in cash or anything like that. The strategy that has been used on the investments is to be over 60% in equities.’ - Bill Gates.
DID YOU KNOW? How will real estate adjust to this new-ish phenomenon: A recent survey of retirees and pre-retirees (ages 55 to 71) who’ve retired within the past 2 years or plan to retire in the next 2 years and had at least $100,000 in assets revealed 27% said they plan to work part-time in retirement and 17% said they expect to gradually reduce their hours before stopping work entirely. Among the retirees, 19% are working part-time and 17% have reduced their working hours. (Marketwatch)
DID YOU KNOW? The rise of e-commerce has pushed up warehouse rents and made industrial buildings one of the hottest sectors in real estate. Now, a slowing economy and trade dispute between the U.S. and China threaten that boom. In a new report, trade group NAIOP forecasts that less new industrial space will be occupied over the next two years, compared to the past two years. The group says the difference between new space being occupied and old space being vacated will drop to 37 million square feet per quarter over the next two years, down from 60 million over the past 2 years. (WSJ)
DID YOU KNOW? The dollar volume of industrial properties sold in the U.S. is on track to break its 2017 record this year, according to a July report from Real Capital Analytics. (WSJ)
DID YOU KNOW? 65% of CFOs say the U.S. economy will not experience a recession in 2020, and they hold this belief even though they do not support the view that more interest-rate cuts are needed from the Federal Reserve to keep the economic expansion going. The majority of CFOs say that the current level of interest rates are “appropriate.” (CNBC)
DID YOU KNOW? ESG - environmental, social and governance matters - is a hot topic amongst the wealthy: Super-rich families are increasingly including sustainability and ethics in founding principles of their private investment firms, according to Fabrizio Campelli of Deutsche Bank. Family offices are now putting ESG in their investment charters. There are some family offices in California that can’t invest less than 40% of their assets in ESG, he said. Demographic shifts are encouraging a surge of activity designed around investments to combat climate change, address inequality or simply to encourage companies to operate in a more sustainable fashion. Assets managed using a broad definition of the approach reached $30.7 trillion at the start of 2018, about a third more than two years before, according to a report funded by a group of financial companies.
DID YOU KNOW? Millennials, those born from 1978 to 1992, will be responsible for 50% of spending in the personal luxury market by 2025. 73% of consumers under age 34 reported being more willing to spend extra on a brand they consider to be environmentally and socially sustainable, according to Nielsen’s research.
DID YOU KNOW? The global economy is set to grow at the slowest pace since the financial crisis, with business investment and trade hampered by an escalating dispute between the U.S. and China that could inflict even more damage over coming years, the Organization for Economic Cooperation and Development said Thursday. The Paris-based research body said it now expects world output of goods and services to increase by 2.9% this year, the smallest annual rise since 2009. (WSJ)
DID YOU KNOW? Have I mentioned once or twice that real estate loves low interest rates? Well, rates were lowered further by the Fed yesterday as expected (cut interest rates by a quarter-point to a target range of 1.75% to 2%, along with a 30-basis-point cut to the interest paid on so-called excess reserves), but as importantly, home building in the U.S. increased in August to the highest level since June 2007, according to Commerce Department. The report cues a positive note for the American housing industry in what has been a year marked by lagging home sales and sluggish single-family construction. Housing starts, a measure of new-home construction, climbed 12.3% in August from the prior month to a seasonally adjusted annual rate of 1.364 million. (WSJ)
DID YOU KNOW? Residential building permits, which can signal how much construction is in the pipeline, rose 7.7% from July to an annual pace of 1.419 million. (WSJ)
DID YOU KNOW? More than 40% of homeowners have experienced damage to their home from drastic weather changes in the fall and winter, according to new research. The survey of 2,000 homeowners found that extreme weather has caused issues for 45% of homeowners. The average cost per year for those who experience weather-related damage is $3,497. Some routine maintenance can prevent this damage: what about messaging doing routine maintenance to prepare for winter to your clients now? (NY POST)
DID YOU KNOW? Canadian Real Estate sales are improving: their Association indicates sales rose 1.9% in May from the previous month, to reach the highest level since January 2018. Actual sales, or not seasonally adjusted, climbed 6.7% from May a year ago, the largest 12-month advance since the summer of 2016. (WSJ)
DID YOU KNOW? Small business loan applications rose again in May, hitting a record high of 27.7% of applications at big banks, versus under 10% in the same period in 2011, and jumping to 49.9% at small banks in 2019, compared with 42.5% in 2011. (NY POST)
DID YOU KNOW? Many home buyers can afford monthly mortgage payments but lack savings for a down payment, boosting the popularity of government-funded assistance programs. More than 13% of borrowers who used the FHA mortgage in the first 3 months of 2019 got government help with the down payment, up from 8.6% five years earlier, (FHA) The share of buyers who used one of the more than 2,500 down-payment-assistance programs across the country doubled to 10% between 2013 and 2016, according to a Freddie Mac analysis of the National Survey of Mortgage Originations.
DID YOU KNOW? Almost 100 million Americans (40% of U.S. adults) will take a family trip in 2019, according to AAA, up slightly from last year. Bankrate.com found in a March 2019 survey of 2,577 adults that 52% are planning a summer holiday this year. Most plan to spend an average of 2-3 weeks income on their vacation/s. 83% will vacation within the USA. (CNBC)
DID YOU KNOW? Will the Fed announce lower interest rates at its meeting on Wednesday? Only 40% of the financial markets believe it will.... the jobs report came in significantly weaker than expected last month, so.... (Marketwatch)
DID YOU KNOW? Was the first half of 2018 the PEAK of the US housing market? For some - not all - areas it appears so. These are signs of a cooling market that we are witnessing in many areas:
1. More price reductions not only on unrealistic asking prices.
2. Longer time to sell.
3. Growing inventory.
4. Fewer bidding wars.
5. Notably reduced sales volume.
6. More lax lending standards
None of this necessarily predicates a 'plunge' as some naysayers continually warn, but these signs should not be ignored when planning, marketing, pricing and negotiating. Agents should re-adjust marketing strategies to allow more time to sell and set realistic expectations up front. We must always be the voice of calm, fact-based reality dealing with the markets as they are - whatever they may be - not what we would want or like them to be.
DID YOU KNOW? Naples was voted the best US beachtown to live in by WalletHub. Congrats! Of the top 25, 44% towns were in Florida and 44% in California. WalletHub compared 192 cities across 62 key indicators of livability....and attainability. Not every beach town is crazy-expensive. The study took into consideration 6 factors to reach its conclusion: Affordability, weather, safety, economy, education & health, and quality of life. Rye, NY was deemed the safest of all the towns and Merritt Island, FL the most affordable and Naples was #1 for quality of life. Using a saved search, YOU can create a Naples beachfront home Collection (or a town you know your clients may be interested in) and send to your network with a link to this story. There are amazing Compass agents in Naples as well as most other great beach towns! (NBC)
"The launch of 5G will be similar to turning on your microwave, opening its door, and leaving it on for the rest of your life. There’s good reason why hundreds of scientists are taking action against the wireless industry." - Paul Wagner. Thanks, Maggie Sherman for reminding us that sometimes with great advancements in technology come great health risks too.... Here are a few tips that can protect you, in the best possible way, from 5G radiation:
1. Keep your distance as much as possible. Keep phones out of bedrooms.
2. Measure levels whenever possible.
3. Buy an EMF shield. HERE are some ideas.
4. Protect your home as much as possible. How close is your home to a cell tower?
5. Eat a healthy diet to boost your immune system.
6. Try earthing, eg: walking barefoot. There are some products that minimize radiation.
7. Educate yourself, team, friends and family as much as possible.
DID YOU KNOW? Total U.S. consumer debt hit $14 trillion in the first quarter of 2019, surpassing the $13 trillion of leverage accumulated in credit cards, auto loans,mortgages and other debt back in 2008, at the beginning of the Great Recession. The US economy has also grown by 19% since 2008 and the US population has grown by almost 8% since 2008. Student loan debt has more than DOUBLED since then, one big negative for first-time homebuyers. (Marketwatch)
DID YOU KNOW? Big private-equity firms, real-estate speculators and other investors that buy properties comprised more than 11% of U.S. home purchasers in 2018.
DID YOU KNOW? Opendoor, Zillow and Offerpad bought nearly 5,000 houses in the Phoenix metro area, roughly 5% of existing homes sold. Big investors now own more than 22,000 rental houses in metro Phoenix. (WSJ)
DID YOU KNOW? US-China trade talks have apparently hit an impass after several weeks of solid hope that a deal was about to be struck. This deal is a critical factor for the US economy right now and one we need to watch closely. Markets don't like uncertainty. (WSJ)
DID YOU KNOW? Roughly 25% of millennials say they receive financial support from their parents for rent, mortgage and student loan payments.13% say their parents pay all of their rent or mortgage. (CNBC)
DID YOU KNOW? The number of households with student loan debt doubled from 1998 to 2016 (Pew). The median amount of loan debt millennials carried was $19,000, significantly higher than Gen-Xers’ balance of $12,800 at the same age. Middle-class life is now 30% more expensive than it was 20 years ago (That's about 1.35% annual inflation). (CNBC)
DID YOU KNOW? IRS data for 2016 show that the so-called 1% of taxpayers earning more than $500,000 in adjusted gross income included 1.3 million of the total 150.3 million returns filed that year. (Marketwatch)
DID YOU KNOW? What was the job most billionaires had before making their billions? SALES. Sales is the driver of ALL business. Sales is the fundamental aspect to all businesses and without it, businesses could not and would survive. Sales are the oxygen of business. No great leader doesn't understand this. Few - if any - super-successful entrepreneurs are bad at sales or don't fully appreciate the role sales play in every organization. (CNBC)
DID YOU KNOW? Sales of new U.S. single-family homes rose to a near 1-1/2-year high in March, boosted by lower mortgage rates and house prices. New home sales increased 4.5% to a seasonally adjusted annual rate of 692,000 units last month, the highest level since November 2017. February’s sales pace was revised down to 662,000 units from the previously reported 667,000 units. Economists polled by Reuters had forecast new home sales, which account for 11.7% of housing market sales, decreasing 2.5% to a pace of 650,000 units in March. The median new house price dropped 9.7% to $302,700 in March from a year ago, the lowest level since February 2017. The drop was because of an increase in the share of homes sold in the $200,000-$300,000 price range.(Reuters)
DID YOU KNOW? While many people retiring might fantasize about a big move, most stay within their own state. The Census Bureau estimates that only 348,000 people moved last year for retirement reasons. These are the 10 most popular retirement cities…
1. Henderson, Nev. 2. San Antonio, Texas 3. Scottsdale, Ariz. 4. Mesa, Ariz. 5. Las Vegas, Nev. 6. Gilbert, Ariz. 7. Surprise, Ariz. 8. Raleigh, N.C. 9. Eugene, Ore. 10. Peoria, Ariz.
DID YOU KNOW? The S&P 500 and the Nasdaq closed at record highs yesterday as strong earnings and Wall Street optimism bolstered retail and health-care companies. The Dow also ended the day with healthy gains. In earnings news, almost 80% of companies to report so far have beaten expectations. (Barrons)
DID YOU KNOW? NIkla Ahola from Compass Naples sent us news that Naples has been voted again the HAPPIEST, HEALTHIEST CITY IN THE USA for the 4th year in a row by Gallup! Salinas, Santa Rosa, Boulder and Ann Arbor came in second through fifth respectively.