2011 has been an interesting year on many fronts. The economy and housing markets have shown promise at times and then dipped again. Gas prices have been up and then again recently down. Europe and banking issues, national debt and credit rankings have all caused the stock markets to rise and fall almost daily.
The unemployment rate has remained very high and in some valley communities there are an obscene number of unemployed. The national unemployment rate has come down recently and there may be some optimism for the economic outlook for our country and specifically for our state.
Ladies and gentlemen, I am doing my best to end the year with some positive views on the real estate market and economy. I continue in that pursuit with the following message. The Associated Press recently reported in the Los Angeles Times Business Section that Americans’ confidence in the economy in November bounced back to its highest level since July, the latest sign that consumers are beginning to feel more cheerful about spending during the holiday shopping season.
The Conference Board, a private research firm, said last Tuesday that its Consumer Confidence Index rose 15 points to 56.0. That’s up from a revised 40.9 in October, which was the lowest level since the recession began and the biggest jump since the 59.2 reading in July. The November number is encouraging, but still far below the reading of 90, which indicates an economy on solid footing.
The confidence numbers are widely watched by economists because consumer spending accounts for 70 percent of economic activity. The confidence of U.S. consumers has slipped amid renewed fears about a second recession. But Americans, who have been grappling with high unemployment and a weak housing market, have shown that they are feeling much more comfortable spending. Over the past few weeks, for instance, they spent more than they ever have during the four-day start of the holiday shopping season.
“Consumers appear to be entering the holiday season in better spirits, though overall readings remain historically weak,” said Lynn Franco, director of The Conference Board Consumer Research Center in a statement. Franco noted that consumers’ assessment of current conditions improved after six months of steady declines. Consumers’ anxiety regarding the short-term outlook for business conditions, jobs and income prospects eased considerably.
One barometer of the index, which measures how shoppers feel now, rose to 38.3 from 27.1. The other gauge, which measures how shoppers say they will feel over the next six months, rose to 67.8 from 50.0. Consumers have some reason to be more confident. Earlier this month, for instance, the Labor Department reported that the job market improved modestly as the unemployment rate nudged below 9 percent. The month marked the 13th consecutive month of job gains.
Barclays Capital analyst Stephen Kim predicts a housing recovery buoyed by improving jobs numbers and the fact prices for nondistressed homes will have stabilized without government support. “In the absence of a government homebuyer incentives, prices for non-distressed home sales have stabilized for almost a year,” Kim said. “This is the most important trend in the housing industry right now, and we are amazed at how little attention it has been getting from the media and the street. This stability on the part of nondistressed prices has occurred despite a very high share of distressed activity and continued declines in overall prices. “Barclays said recent economic data — including higher job creation in November, housing starts and improved homebuyer traffic — point to some improvement potential in the sector.
We have truly been through a lot this year and I have tried to cover topics of interest and to provide helpful information. I would encourage you to use the internet to do some research for yourself and become more knowledgeable on any subject you are interested in. When you are ready I know hundreds of qualified Realtors who would be more than happy to help provide answers to your specific questions. The toughest part of writing this article each week is to come up with a topic. This next year don’t hesitate to give some feedback to next year’s LAR President, Diane Gallagher. Diane is a super lady and you will enjoy reading her article each week.
There is hope for the real estate market this next year. Prices will still be down. The inventory should increase. Loans should be available. Hopefully more people will be able to find a good job. I wish you all the best and as always consult a Realtor.
Questions or comments can be made to Kerry Suess at firstname.lastname@example.org.