NAR

The Upside and Downside of Rising House Prices

The Upside and Downside of Rising House Prices

A couple of months ago, I noted that the housing market had a problem: there were too few homes for sale. Persistently low inventory means that there are a lot of frustrated would-be buyers out there, spending weekends at open houses. It also has led to home prices continuing to rise at a more than six percent clip from a year ago.

#338 Hot Housing: How to Buy and Sell

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Yes, this is still here, and it will be for a while longer to serve as a reminder that there's a new place for Jill on Money content - YouTube!  Seems like a no-brainer, but sometimes it takes a little outside help (h/t to JOM friend, Joe A!) to recognize the obvious.  So don't freak out.  Going forward, we're going to put all our radio and podcast content on YouTube! It'll be easier for you to navigate and listen to past shows, because everything will be in one place.  Just click any of the links below and you'll be able to listen to this week's show as well as anything else you see that might interest you, including all the Better Off podcast content if you haven't been listening. Let us know what you think by emailing us at askjill@jillonmoney.com.

CLICK HERE FOR LATEST SHOW ON YOUTUBE

Aug 26 Download Hour One Here

You know the deal...hour one is all about your calls and emails.  This week we started with Ray in Connecticut who had some questions about Required Minimum Distributions (RMDs) and withdrawal strategies, as he approaches retirement.  Next up was Bob from San Francisco who finds himself in the awesome position of having over a million bucks sitting in the bank after selling his business and house.  With more money than he's ever had, he was looking for the best game plan going forward.

CLICK HERE FOR LATEST SHOW ON YOUTUBE

Aug 26 Download Hour Two Here

Hour two this week is devoted to the housing market.  Prices are up, inventories are down which means the housing market is hot again. It’s not like the crazy days of 2005, but conditions are a bit frenzied. To prepare for what is likely to be the biggest asset purchase or sale you’ll make in life, we turn to Stephen Gasque, host of Real Estate Today, a weekly radio program presented by the National Association of Realtors.

One of the topics we spent some time on is the current inventory crisis (inventory has declined year-over-year for 26 consecutive months) and why it’s seemingly harder than ever for potential buyers to find and land the home they want. Why is the competition among buyers more intense than ever?

Some of the other topics we discussed:

-What are the most common mistakes people make when buying or selling? -What’s the most important step for a potential buyer? -How to successfully invest in real estate as a rental property -The future of mortgage interest deductions -Renting versus buying

If you’re planning on going to an open house this weekend, give this one a listen for some tips that could increase your odds of landing the house before you walk through the front door.

Thanks to everyone who participated this week, especially Mark, the Best Producer/Music Curator in the World. Here's how to contact us:

  • Call 855-411-JILL and we'll schedule time to get you on the show LIVE 

Ep. 031 - Hot Housing: How to Buy and Sell

Prices are up, inventories are down which means the housing market is hot again. It’s not like the crazy days of 2005, but conditions are a bit frenzied. To prepare for what is likely to be the biggest asset purchase or sale you’ll make in life, we turn to Stephen Gasque, host of Real Estate Today, a weekly radio program presented by the National Association of Realtors.

Whether you’re a first-time buyer or seller, Steven is full of tips to help you navigate the process.

One of the topics we spent some time on is the current inventory crisis and why it’s seemingly harder than ever for potential buyers to get the home they want. Why is the competition among buyers more intense than ever?

Some of the other topics we discussed:

  • What are the most common mistakes people make when buying or selling?
  • What’s the most important step for a potential buyer?
  • How to successfully invest in real estate as a rental property
  • The future of mortgage interest deductions
  • Renting versus buying

If you’re planning on going to an open house this weekend, give this one a listen for some tips that could increase your odds of landing the house before you walk through the front door.

“Better Off” is sponsored by Betterment.

Have a finance related question? Email us here or call 855-411-JILL.

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"Better Off" theme music is by Joel Goodman, www.joelgoodman.com.

Super Mario to the Rescue, Greek Election, Fed Fun

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After four years of doing absolutely nothing to propel the moribund Euro Zone economy, European Central Bank President Mario Draghi (aka Super Mario) finally unveiled the ECB’s version of bond buying last week, where it will buy €60 billion ($68 billion) of bonds a month in an effort to boost stagnant growth and fight falling prices. The ECB will fire up the printing presses in March and will conduct the purchases “until we see a sustained adjustment in the path of inflation.” So although the European version of QE at first seemed half the size of that in the US and UK, the open-ended prospect seemed to quell fears that it was not enough.

While on the topic of Europe, it is worth noting that there is a big election in Greece today, where Alexis Tsipras, the leader of the leftwing, anti- austerity Syriza party is leading in the polls. There are fears that Tsipras might lead Greece out of the euro zone (the so-called “Grexit”), but it now seems more likely that he will seek a restructuring of debt with the Troika (the European Commission, the European Central Bank and the International Monetary Fund).

As a reminder, Greece has suffered through six years of economic contraction, triggered by over-the-top spending, the financial crisis and then exacerbated by fiscal belt-tightening imposed by the Troika. According to Capital Economics, Greek “gross domestic product is now a quarter smaller than it was in 2008. A quarter of the working age population is out of work. Only half of the eligible young have jobs.” Both the Troika and Greece have reason to come to terms, which should prevent a Grexit, at least for now.

Here in the US, the week ahead should be a little less dramatic. The Federal Reserve will conduct a two-day policy meeting, where it is widely expected to maintain its recently adopted language that it “can be patient in beginning to normalize the stance of monetary policy.” With wage growth tepid, no meaningful increase in core inflation and global uncertainty swirling, the Fed is likely to sit still and do nothing.

On Friday, the first reading of fourth quarter growth is due. GDP is expected to increase at a 3.2 percent annualized rate. That would be downshift from the strong 5 percent gain in the third quarter, but would still be a lot better than the 2.25 percent pace of the recovery.

Finally, there was some concern late last week, after the National Association of Realtors released its Existing Home Sales report. While sales accelerated in December, for all of 2014, existing home sales dropped by 3.1 percent from 2013, the first annual decrease since 2010. The problem was a lack of inventory, but as Bill McBride of Calculated Risk points out, “the NAR inventory data is ‘noisy’ and difficult to forecast based on other data.” The good news is that “distressed sales were down sharply - and normal sales up around 7 percent.” With the economy strengthening, confidence building and mortgage rates at 18-month lows, home sales should accelerate in 2015.

MARKETS: Stocks rose, snapping a three-week losing streak and the euro dropped to its lowest level ($1.12) in 11 years.

  • DJIA: 17,672, up 0.9% on week, down 0.8% YTD
  • S&P 500: 2051, up 1.6% on week, down 0.3% YTD
  • NASDAQ: 4757, up 2.7% on week, up 0.5% YTD
  • Russell 2000: 1189, up 0.3% on week, down 1.3% YTD
  • 10-Year Treasury yield: 1.79% (from 1.84% a week ago)
  • March Crude Oil: $45.59, down 7.2% on week
  • February Gold: $1,292.60, up 1.2% on week
  • AAA Nat'l average price for gallon of regular Gas: $2.04 (from $3.29 a year ago)

THE WEEK AHEAD:

Mon 1/26:

DR Horton, Microsoft, Texas Instruments

Tues 1/27:

3M, Apple, AT&T, Caterpillar, Coach, DuPont, Pfizer, P&G, Yahoo

FOMC 2-day meeting begins

8:30 Durable Goods Orders

9:00 Case Shiller Home Price Index

10:00 New Home Sales

10:00 Consumer Confidence

Weds 1/28:

Boeing, Facebook

2:00 Fed Policy Announcement

Thurs 1/29:

Amazon, Conoco Phillips, Ford, Harley Davidson, Visa

8:30 Weekly Jobless Claims

10:00 Pending Home Sales

Fri 1/30:

Altria, Chevron, MasterCard

8:30 Q4 GDP (1st estimate)

9:45 Chicago PMI

9:55 U Mich Consumer Sentiment