Good morning to the month of Thanksgiving,
Both real estate and stock markets are not singing “Up Up and Away” this past month, with the Federal Reserve raising rates, the noise of political elections, and uncertainty of a shift in political power. Regardless, be sure to vote for what is best for you and best serves the community you call home. Please don’t let the bias of special interests control your vote. Instead, do your research and vote wisely.
In the face of rising rates and subsequent slow down in home sales, there is a guess our local real estate market may post the first year-over-year price declines of several years. This unexpected shift from a Seller’s Market to one favoring the Buyer, was sudden and unexpected. Is it a harbinger for the future? For sure, it is time for a healthy breather, after being up 13.5% per year for 5 years. Moreover, from a long-term perspective, real estate ownership has seen a 59-year annual appreciation of 7.64 %. The lesson: Buying and holding wins the race.
Why is the above important? Because my concern is about your future – being safe and secure.
Call us as we help you hold to a steady discipline of study and planning.
Please do not let unnecessary fears dominate your thoughts. We can help
Points of Interest:
A number of quotes from the Bowtie Economist, Elliot Eisenberg. He has put forth very interesting data and does so in a manner making it easy to quote, rather than paraphrase.
1) Christmas Spending: With the strong economy, it is estimated our Holiday spending will increase 4.6 %, a bit cooler than last years 6.1 %. Challenges are shipping costs and workers.
2) Employment: While September employment growth of 134,000 new jobs was slightly disappointing and probably due to Hurricane Florence, the report was otherwise excellent. Upward revisions to July and August totaling 87,000 were spectacular, and the unemployment rate hit 3.7%, lowest level since 1969! Year-over-Year wage growth for the bottom 10% of workers, rose 5.1%, topping average hourly earnings growth of 2.8%. Regrettably, the labor force participation rate remains stuck at 62.7% – (overall average, 1950-2018, is 62.9%.)
3) Recession Triggers: “While predicting the cause of the next recession is impossible, here are probabilities based on all recessions in the seven largest democracies since 1960. 26% of the time it was monetary policy, next came bursting of a credit bubble at 17%. Third was an oil price shock or the bursting of a housing bubble, each at 12%, and banking crises was next at 10%. Monetary policy is my bet.”
4) Congress: (my paraphrase) A counter point to my often times hammering on Congress. Lawmakers enacted 5 of the regular 12 bills to fund government on time. This is the MOST Congress has done on time in 22 years! And, the 5 bills cover 75 % of the funding Congress controls. The rest fixed with a stopgap until December.
Our Monthly: The Good, Bad n’ Ugly:
The Good:
We are a Constitutional republic, based in the rule of law, within a democratic process governed by our right and freedom to vote. Let’s rejoice!! It is also good to see messages were learned from our Presidential elections and have been received in the internal debates of both parties.
The Bad:
Causing some to bear the ever increasing burden of others, in a disproportionate way, is called progressive taxation. This is our California system. Is more fairness possible? Yes. But for California, with serious debt and pension issues, No! Instead, there is a call for the dismantling of Proposition 13. Add to this political promises for even more public services, it becomes the easy target for new money. Be very careful what you ask for and vote for!
The Ugly:
Picking an issue we should work to resolve? How about where the homeless live. We have areas of open land – State, County, City – but seem to prefer land by freeways and byways. Why not allow them camps in specific locations, providing better services and protection – including health. Plus, by lowering existing direct cost, more money could be allocated for better, more accessible services. Just saying. Doesn’t it seem time to stop talking and time for more “doing”? We can do better.
In Closing
In spite of “talk” about our slowing marketplace, people are still in transition and setting down roots. With increasing employment, wages, and a growing economy, change is always happening. Thus as you look ahead, please consider us to be a trusted partner, even for your friends, colleagues and other family members. We have the insightful data to help in the important decision of buying real estate. Call us. This decision is more important than buying stocks or bonds, hoping for what happens next. Allow us to be part of the conversation.
Thank you for your loyalty, business, and referrals. When you need help, give us a call. Our knowledge and expertise includes debt planning, fiscal planning, and tax deferral. These are our strengths, as is sound planning and preparation, and key to success, safety, and security.
Our team is ready to help you achieve your dream, now.
Call today!
Have a blessed day as we remain gratefully yours.