Tuesday, October 30, 2012

Let's Talk... 
16 Percent Rise in Housing Starts, but will it be enough!?

Housing Data Wrap-Up: October 2012 Wells Fargo Securities Reports...


Housing Stands Out Amid the Recent Economic Gloom
 With housing activity accounting for such a small portion of overall GDP, even the 16 percent rise in housing starts we are now projecting for 2013 is not enough to move the needle in a meaningful way.

Overall economic growth continues to putter along at around a 2 percent pace, as businesses remain reluctant to commit to major capital investments or hire new workers in a significant way. Economic growth in the third quarter was largely supported by continued gains in consumer spending and a rebound in defense spending. Now, with the fiscal cliff nearing and manufacturing activity slowing in response to slower global economic growth, expectations for economic growth for the coming year have been reduced even further. While overall growth is expected to slow, home sales and residential construction in particular are expected to increase.

The divergence between overall economic growth and housing is unusual but not unexpected. We have noted that housing would still likely strengthen even if overall growth weakens. The incongruity between decelerating real GDP growth and an improvement in homebuilding is made possible by the enormous magnitude of the housing bust, which saw residential construction activity tumble from a peak of 6.3 percent of GDP in Q4 2005 to just 2.5 percent in Q3 2012. With housing activity accounting for such a small portion of overall GDP, even the 16 percent rise in housing starts we are now projecting for 2013 is not enough to move the needle in a meaningful way, particularly with exports slowing, government spending contracting and taxes increasing.

Another more fundamental reason homebuilding can improve with even slower economic growth is that new homes now face less effective competition from foreclosures. However, there are still plenty of foreclosures in the pipeline. The latest data from LPS Analytics show more than 2.1 million homes in foreclosure and another 1.57 million homes have mortgages that are 90 days or more past due. The good news, however, is that there has been considerable progress made at clearing out foreclosures, particularly in hard-hit states like Florida and Arizona. With many of the best properties already sold, distressed transactions are now accounting for a smaller share of  overall sales. The drop in competition from foreclosures has bolstered builder confidence.

Raising the Ceiling on Our Housing Forecast
September’s housing starts figures were eye-opening. Overall starts surged 15 percent, and previously reported data were revised higher.

We have raised our forecast for new home sales and housing starts in 2013 and 2014 due to recent reports from homebuilders, strong gains in building permits and starts, record low new home inventories, and the Fed’s stated intentions to purchase large quantities of mortgage-backed securities on an ongoing basis. September’s housing starts figures were eye-opening. Overall starts surged 15 percent, and previously reported data were revised higher. With September’s increase, housing starts through the first nine months of 2012 are running 26.6 percent ahead of their year-ago pace. Single-family starts are up 23.5 percent, while multifamily starts are up 34.7 percent. Most of the gain in multifamily starts has been in apartment construction.

The significant September jump in housing starts may exaggerate the extent of the improvement in new home construction. Starts tend to bounce around quite a bit and it is not uncommon to see large revisions to previous months’ data. We are also headed into the seasonally slow months, in which the seasonally adjusted numbers can show wide swings on relatively small changes in actual activity. These swings tend to be amplified by weather conditions. September’s spike in starts did not materially affect our 2012 forecast, but given the strong gain in permits, which are running slightly ahead of starts, the gain in the Wells Fargo/NAHB Homebuilders’ Index and robust orders data from several large homebuilders, we raised our expectations for 2013 and 2014 to 990,000 and 1.17 million homes, respectively.

With foreclosures and short sales accounting for a smaller proportion of overall sales, home prices have also firmed up slightly more than had earlier been expected. The median price of an existing home has risen 11.3 percent over the past year, and the S&P/Case-Shiller 10-city home price index is now up 0.6 percent year over year. New home prices have also improved, reflecting less effective competition from distressed sales. Many of the best properties have already been sold and what is left is either geographically or physically less attractive than new construction.

Our forecast for continued gains in residential construction is predicated on successfully navigating around the fiscal cliff. We forecast real GDP growth will likely slow at the start of 2013, as the economy is hampered by the expiration of the temporary 2 percentage point reduction in Social Security taxes as well as the implementation of the taxes associated with the new health care law. After a sluggish start, economic activity should gain momentum throughout the year, and homebuilding should add modestly to overall growth. Inventories of new single-family homes remain near all-time lows in an absolute sense, at just a 4.5 month supply relative to recent sales. With the Fed committed to purchasing mortgages and keeping interest rates low, builders should be slightly more confident about building inventory going into the key spring selling season, and builders have better access to credit today than at any time since the building boom ended.

The recent strength in the apartment market is another factor that should keep homebuilding humming in 2013. Vacancy rates on apartments have fallen 1.2 percent over the past year, helping drive rents 2.7 percent higher. Interest in developing new apartment communities remains high, and permits are running slightly ahead of starts. We expect multifamily starts to rise 29.2 percent in 2013, following a 25.8 percent gain this year. Over the long term, we expect apartments to account for a larger proportion of homebuilding than they have in the past, reflecting an increased preference for rental housing, particularly among younger households.

Release Consensus Actual Prior Revised Next Release NAHB Sentiment Index October 41 41 40 n/a Nov-19 Housing Starts, Thousands of Units September 770K 872K 750K` 758K Nov-20 Housing Permits September 810K 894K 803K 801K Nov-20 Existing Home Sales, Millions of Homes September 4.75M 4.75M 4.82M 4.83M Nov-19 Percent Change September -1.6% -1.7% 7.8% 8.10% Nov-19 New Home Sales, Thousands of Units September 385K 389K 373K 368K Nov-28 Percent Change September 3.2% 5.7% -0.3% -1.3% Nov-28 S&P Case/Shiller Composite-20 YoY July 1.1% 1.2% 0.5% 0.6% Oct-30

Wells Fargo Securities Economics Group publications are produced by Wells Fargo Securities, LLC, a U.S broker-dealer registered with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, and the Securities Investor Protection Corp. Wells Fargo Securities, LLC, distributes these publications directly and through subsidiaries including, but not limited to, Wells Fargo & Company, Wells Fargo Bank N.A., Wells Fargo Advisors, LLC, Wells Fargo Securities International Limited, Wells Fargo Securities Asia Limited and Wells Fargo Securities (Japan) Co. Limited. The information and opinions herein are for general information use only. Wells Fargo Securities, LLC does not guarantee their accuracy or completeness, nor does Wells Fargo Securities, LLC assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice, are for general information only and are not intended as an offer or solicitation with respect to the purchase or sales of any security or as personalized investment advice. Wells Fargo Securities, LLC is a separate legal entity and distinct from affiliated banks and is a wholly owned subsidiary of Wells Fargo & Company © 2012 Wells Fargo Securities, LLC.
Important Information for Non-U.S. Recipients
For recipients in the EEA, this report is distributed by Wells Fargo Securities International Limited ("WFSIL"). WFSIL is a U.K. incorporated investment firm authorized and regulated by the Financial Services Authority. The content of this report has been approved by WFSIL a regulated person under the Act. WFSIL does not deal with retail clients as defined in the Markets in Financial Instruments Directive 2007. The FSA rules made under the Financial Services and Markets Act 2000 for the protection of retail clients will therefore not apply, not will the Financial Services Compensation Scheme be available. This report is not intended for, and should not be relied upon by, retail clients. This document and any other materials accompanying this document (collectively, the "Materials") are provided for general informational purposes only.


Sunday, October 28, 2012

Let's Talk...The State of Illusion!

Good movies are based on the successful attempt to tell a story. People v. The State of Illusion takes you further, by making you part of the story being told. This film, by Austin Vickers, questions the very nature of reality, and through an examination of our perceptions, beliefs and imagination, makes you both judge and jury in what will be the most important trial you will ever witness. This must-see psychological movie includes, as expert witnesses, some of the nation’s leading thinkers in the fields of neuroscience, biochemistry, psychology, quantum physics, and consciousness theory, including Dr. Thomas Moore, Dr. Candace Pert, Debbie Ford, Dr. Joe Dispenza, Dr. Robert Jahn, Dr. Peter Senge, Brenda Dunne, and Dr. Michael Vandermark.

People v The State Of Illusion, directed by Scott Cervine and written and produced by Austin Vickers, is set in the notorious “Old Main Prison” of the New Mexico State Penitentiary, and tells the story of Aaron Roberts, a single father who is arrested and tried on charges following an incident that claims the life of a woman. He is convicted and sent to prison, and his daughter becomes a ward of the state. While there, an attorney learns of her plight and the story of her father, and decides to represent her in an emotionally-compelling case against the State. It is an inspiring movie that will wake you up to the power of your imagination, encourage your hope and elevate your spirit.

Monday, October 22, 2012

Let's Talk...
Naples International Film Festival Is comming to town!


The 2012 Naples International Film Festival Information...

When is the 2012 Naples International Film Festival?
The Fourth Annual Naples International Film Festival takes place November 1-4, 2012.

How do I purchase tickets to films and events?
Tickets to all of our films and events are available for purchase HERE.

How much do film tickets cost?

Opening Night Film & Party
Naples Philharmonic Center for the Arts
November 1, 2012
General Admission Film Only Ticket - $29
VIP Film & Party Ticket- $159

Silverspot Cinema Showings
November 2-4, 2012

New this year.... NIFF All-Star Party Pack - $125.00
Visit the Silverspot Cinema box office to buy the NIFF All-Star Party Pack, which includes 12 film vouchers for the price of 10! Then, return to the Silverspot box office once you’ve decided which films to see and simply exchange the vouchers for actual NIFF movie tickets. Available while supplies last.
Each NIFF Voucher is redeemable only for one Naples International Film Festival (NIFF) 2012 Festival Film ticket at Silverspot Cinema, Mercato. Unauthorized reproductions not allowed. Cannot be redeemed for cash. This voucher is not a movie ticket, and does not guarantee the holder to entrance or seats at any NIFF 2012 screening. Can only be redeemed in person at Silverspot box office for a NIFF Film Ticket for NIFF 2012 screenings only, November 2-4, 2012. Voucher not valid at any other location, or for any other Silverspot or NIFF film or event. Voucher cannot be replaced if lost or stolen. Cannot redeem for tickets online. Voucher must be surrendered upon redemption.

How do I get Tickets?
Opening Night Film & Party tickets are available at the Philharmonic Center for the Arts website at www.thephil.org, or by calling the box office at (239) 597-1900. Get film tickets in person at the Silverspot Cinema, or online at www.silverspotcinema.com.

Maps and Directions
For directions to all of our venue partners, please visit www.naplesfilmfest.com/map-directions.html.


Thursday, October 11, 2012

Let's Talk...
What to expect when you’re Inspecting!!!
TALLAHASSEE, Fla. – Oct. 11, 2012 – Many homebuyers don’t understand how a home inspection works. Buyers should first understand an inspection isn’t adversarial. Everyone involved in the purchase – the buyer, the buyer’s agent and the listing agent – have the same goal, which is to move forward with a clean sales transaction.

Inspection tips

• The buyer, who hires and pays the inspector, should make sure the inspector is licensed. He or she should also read the seller’s disclosures and note any questions they have for the inspector.

• If possible, buyers should follow the inspector everywhere, including the roof and into the basement or crawlspace. However, buyers should understand that an inspector’s job is to note problems. He may not have all the answers, such as information about the cost of potential improvements.

• While the home listing agent advocates for the seller, the buyer’s Realtor should also take part in the inspection to help advise the buyer how to proceed if the inspector uncovers serious flaws.

• After the inspection, the buyer and his Realtor should examine the detailed inspection report and discuss the next step.

• Experts generally recommend that buyers not bring along a relative or friend who is a contractor. Since they’re not licensed property inspectors, contractors could raise unnecessary red flags that hamper the transaction.

Full inspection versus four-point inspection

For some older properties, mortgage lenders or insurers require a four-point inspection, which sounds as if it’s top of the line compared to, say, a one-point inspection that doesn’t actually exist. However, “four point” refers to the number of housing elements checked, not the quality of the inspection.

Since the cost of the four-point inspection is generally lower than a full inspection, some buyers cut corners to save money. However, they should understand what a four-point inspection does not cover.

In general, the elements covered in a four-point inspection are the ones that could cost a lot to repair should something go wrong shortly after a home purchase. They include: roofing, electrical work, heating-air conditioning systems and plumbing.

Other elements that can need repair in the early years of homeownership – such as appliances, hot water heaters, etc. – are not included in a four-point inspection.

© 2012 Florida Realtors®

Tuesday, October 9, 2012

Let's Talk... Hot off the Press!!!
More than one in five homeowners will refinance within year, data shows
October 09, 2012 03:00PM
Fed Chairman Ben Bernanke
Despite the skepticism surrounding QE3, the Federal Reserve’s plan to buy up some $40 billion in mortgage bonds a month, new data cited by Bloomberg Businessweek shows that efforts of the Fed and the Obama Administration to mend the housing market are making a difference — keeping interest rates at record lows and boosting refinancing applications.
More than one in five borrowers will restructure their home loan within the next year; of that fifth, those who have at least 20 percent equity in their homes are the most likely to refinance. An estimated one in three will lower their interest rates over the next year if the Reserve holds its course, according to Lender Processing Services data analyzed by Businessweek.

And for those who are still underwater, the Obama administration’s Home Affordable Refinance Program has allowed for a 65 percent increase since the start of 2012 in the refinancing for those that own at least 20 more than their home’s value, Businessweek reported.
“You get more benefit when people buy homes. … It’s the purchases of new homes that generate the construction activity, the furnishing, all those things that help the economy grow,” Ben Bernanke,
Chairman of the Federal Reserve, said last month at a press conference. [Businessweek]Christopher Cameron