Posts Tagged ‘construction’

The Week Ahead

From our friends at Calculated Risk

The most anticipated event this coming week is Fed Chairman Bernanke’s speech at Jackson Hole on Friday.

The key economic releases this week are July New Home Sales on Tuesday and the second estimate of Q2 GDP on Friday. Several high frequency releases will be closely watched: weekly initial unemployment claims, consumer sentiment (final) and two more regional Fed manufacturing surveys. On Monday, the MBA will release the Q2 National Delinquency Survey.

—– Monday, Aug 22nd —–

8:30 AM ET: Chicago Fed National Activity Index (July). This is a composite index of other data.

10:00 AM: Mortgage Bankers Association (MBA) 2nd Quarter 2011 National Delinquency Survey (NDS)

The MBA reported 8.32% of mortgage loans were delinquent at the end of Q1, seasonally adjusted, and another 4.52% were in the foreclosure process (total of 12.84%). The delinquency rate probably decreased in Q2, but the in-foreclosure rate probably increased.

Expected: The Moody’s/REAL Commercial Property Price Indices (commercial real estate price index) for June.

—– Tuesday, Aug 23rd —–

10:00 AM: New Home Sales for July from the Census Bureau.  The consensus is for a slight increase to 313 thousand SAAR in July.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for August. The consensus is for the index to be at minus 7, down from minus 1 in July. (below zero is contraction).

—– Wednesday, Aug 24th —–

7:00 AM: The Mortgage Bankers Association (MBA) will release the mortgage purchase applications index. This index has been very weak over the last several months, although refinance activity probably increased sharply last week.

8:30 AM: Durable Goods Orders for July from the Census Bureau. The consensus is for a 2.0% increase in durable goods orders after decreasing 2.1% in June.

10:00 AM: FHFA House Price Index for June 2011. This is based on GSE repeat sales and is no longer as closely followed as Case-Shiller (or CoreLogic).

—– Thursday, Aug 25th —–

8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for an increase to 415,000 from 408,000 last week.

11:00 AM: Kansas City Fed regional Manufacturing Survey for August. The index was at 3 in July.

—–Friday, Aug 26th —–

8:30 AM: Q2 GDP (second estimate). This is the second estimate for Q2 GDP from the BEA.

The first estimate was for 1.3% annualized growth in Q2. The consensus is for a downward revision to 1.1% annualized real GDP growth.

9:55 AM: Reuters/University of Mich Consumer Sentiment final for August. The consensus is for a slight increase to 56.0 from the preliminary August reading of 54.9.

10:00 AM: Fed Chairman Ben Bernanke speaks at the Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole, Wyoming, “Near- and Long-Term Prospects for the U.S. Economy”

Market Update for 8-16

Mortgage Backed Securities have rallied this a.m.

A mixed bag of news is causing bonds to rise slightly and stocks to fall. Germany is showing signs of trouble and concerns stocks. We also had a weak housing start number (bond friendly) and Fitch has affirmed their AAA rating for US bonds. Nice!

Treasuries and mortgages started a little better this morning with the stock indexes trading lower, suggesting a weak opening at 9:30. Mortgage markets stalled here for the last few days with markets consolidating recent strong moves. The stock market put three consecutive days up or the best showing in weeks, this morning a little pullback on the open.

At 8:30 July housing starts were expected down 3.5% but declined just 1.5%; building permits were right on forecasts, down 3.2%. Housing still in depression and likely will continue to be well into next year. Housing starts so far this year are running on a 566,000 pace for all of 2011. The result compares with last year’s tally of 587,000 starts, the second-fewest on record. Home construction totaled 554,000 units in 2009, the lowest since record-keeping began in 1959. During the past decade’s housing boom, starts reached a peak of 2.07 million in 2005. (data from Bloomberg)

July import prices were up 0.3% while US export prices declined 0.4%. Paying more for imports while earning less on exports. July imports followed a revised 0.6% drop in June.

At 9:15 July industrial production, expected +0.4%, increased 0.9%; July capacity utilization, expected at 77.0% from 76.7% in June increased to 77.5%. Better than expectations pushed treasuries down a little and mortgages lower. The better reports on housing starts and industrial production and capacity utilization helped take some pressure off stock indexes which were down 100 points on the DJIA to -55.

Fitch came out this morning affirming US credit rating at AAA; S&P lowered the US rating to AA2 and sent the stock market into a tail spin before recovering the last three days. S&P is feeling the pressure over its US downgrade. Eleven days after lowering the credit rating on the U.S. for the first time, the rating agency is suffering a downgrade among global investors as American bonds are proving world beaters — undermining S&P’s mathematical assumptions — and prompting disbelief among political scientists months after the company upgraded China because of the stability fostered by Communist Party rule.

At 9:30 the DJIA opened -90, the 10 yr note +3/32 at 2.30% and mortgage markets, choppy this morning, down 2/32 (.06 bp) at 9:30.

No growth in Germany in Q2, or in the euro zone overall. Germany’s GDP rose 0.1% from the first quarter, when it jumped a revised 1.3%. Economists had forecast growth of 0.5%. A separate report today showed euro-area economic growth slowed in the second quarter more than economists had forecast. Gross domestic product in the 17-nation euro area rose 0.2% from the first quarter, when it increased 0.8%; estimates were for an increase of 0.3%. The German DAX declined to, the first decline in four days, on the soft economic data.

German chancellor Merkel and French Pres Sarkozy will meet later; according to press reports there will be no discussions regarding issuing euro bonds in an effort to shore up those debt ridden economies in the zone.

The wider look for US interest rates remains positive, but we are becoming concerned that the benchmark 10 yr note tested and failed to break below 2.00% last week; below 2.00% would be the lowest rate on the 10 yr note since back in the 50s. The 10 hit 2.00% back in 2008 as the subprime crisis unfolded and took down Lehman Bros and others. It is less likely now that rates will fall much over the next couple of weeks as markets are likely to swing around with not much changing until the Jackson Hole conference that begins August 26th.

The Troll

Unemployment and the Puget Sound

The Seattle Times reported our state unemployment numbers today. The report shows the unemployment rate for the State of Washington is 9.1% with the private sector adding 8,300 jobs for the month while the public sector shed 2,500 jobs. What the Troll found promising was the pickup in construction related jobs. According to the report, construction led the way by adding 2,400 jobs followed by professional and business services (1,700) and manufacturing (1,200). Of the jobs lost 1,100 were federal and 1,400 were at the state and local level. There were 307,000 unemployed in Washington with 217,000 receiving unemployment benefits.

In other news courtesy of the Seattle Times, the state’s ecology department overestimated oil related pollution levels in the Puget Sound by a huge margin. The ecology department reported to PBS Frontline in 2008 that Exxon Valdez spill levels were occurring in the Puget Sound on a cumulative basis every 2 years. That was wrong and is in fact dozens of times lower than what was reported. The news is great for the Troll who may actually take a dip at Shilshole this summer.…..if there is a summer.

The Troll

Spring Break Fun and Local News

The Troll has been able to keep up his torrid work schedule by enlisting the help of an old ally, Grandpa Troll. With the kids out of school for the week the Troll had the foresight to fly in a ringer. Yes, Grandpa Troll to the rescue. Items on the schedule this week include the Star Wars exhibit at the Pacific Science Center (really cool), the newly released Hop, a Mariners day game and some well timed outdoor activities (is that the sun?). And since the Troll has a quiet office he can relay some news.

I drove by the Bill and Melinda Gates Foundation yesterday and saw that it was nearly completed. It appears that it will be ready for operations this summer. The Gates Foundation is currently hiring for numerous positions in global health and will employ in the neighborhood of 2,000 in its new Seattle Headquarters.

Vulcan Inc. (Paul Allen) is also in the final stages of completing the new Amazon Headquarters. The estimates on that project (11 buildings and 1.6 million SqFt) reveal that approximately 6,000 Amazon employees will be working in South Lake Union.  The new jobs are a welcome sight and should provide a boost in demand for our local housing market.

In other news, Mercer St was closed this past weekend and will be closed an additional 20 weekends.

The Troll

Spring Market

Spring has sprung and it’s time to talk about some helpful tips on readying your property for the market. If it is curb appeal you are looking for try focusing on landscaping and exterior paint. Painting is less expensive than other types of projects and you can Do It Yourself! A clean yard is also a must. Make sure you mow, weed your planters and prune your bushes. Now is the perfect time as the ground is easier to work. Also, barking is easy and I’m not talking about your neighbors’ dog. You can cover some unsightly areas of your yard by simply applying ground cover. These few steps can keep some serious cash on the table when negotiating a sale.

Wallingford Realty Inc. has also teamed up with a local licensed and bonded builder for project’s that require more involvement. We can discuss sensible home beautification projects that current buyers crave. Let’s face it, you have to distinguish yourselves in this market and properties that are priced appropriately and have curb appeal can bring much more attention and possibly multiple offers.

The Troll

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