Your August 2023 Residential Lending Successes and News

Good morning to Summer fun in August,

Mortgage Rates Trending Upwards –


Our Goal:

Turning words, charts, and data into cash, assets, and wealth.

Our conversations and strategies bring my decades of experience and learning, to add to your knowledge, ability and goals. Results are superior growth, smoother transactions – and less stress. These strategies match over the working years, maintenance years, and draw down years.

Key to success: It doesn’t happen in a vacuum. One needs the experience of a proven professional. Let’s talk. Call Mike.


Points of interest:

  • Economic Drivers: Pundits backtracking talk of recession, But more, the recent downgrading of the United States as a creditor. More on this later. Be watchful!!
  • Government and Elections: We talk, “Stop deficit spending.” But our servants choose the sound of money, over our vote, without care to consequence. How unfortunate. Being re-elected is the singular motivation and we get blindsided. Which makes sense, as we can’t hold them accountable. Tough spot.
    • Real Estate: Cooling Inflation

Locally, not happening. Real estate is local, here is the data from the high levels.

Case-Shiller: expected to reach new highs for values with their June report

FHFA: hit new high’s last February

CoreLogic: new highs for values with their June

Black Knight: hit new high’s with May report

Zillow: hit new high’s with June report

Most groups are targeting between 5 and 10 % appreciation for 2023, with a couple points more in the 2024 forecasts. New home construction is only meeting between 80 and 90 % of expected household formation. There is new construction of apartments coming online with anticipation for cooling in rental price increases. It may soak up a bit of the under supply issue. The next couple of years should bring clarity. During this time frame, the big head-wind to needed new construction, maybe our current higher interest rate environment. Nothing is obvious.

And for the rental market:

Tight supply continues price increases in rentals:  Recent report from Rent-O-Meter:

Year-Over-Year Change in Average Rent: 3-BR SFRs.

Rent prices in these five California cities experienced the following year-over-year rent increases in Q2 2023:

  • The average San Diego rent price is $4,832 with a year-over-year rent price increase of 17%
  • The average Los Angeles rent price is $5,071 with a year-over-year rent price increase of 14%
  • The average San Jose rent price is $4,240 with a year-over-year rent price increase of 10%
  • The average Sacramento rent price is $2,518 with a year-over-year rent price increase of 7%
  • The average San Francisco rent price is $5,265 with a year-over-year rent price increase of 6%
  • Federal Reserve: Recession and Full Employment

The Federal Reserve policy on inflation is tricky, filled with trade-offs. Our employment numbers continue good. We also know inflation continues to exceed wage growth. Last week we added the additional challenge of the downgrading of the US credit. The Good: Both England and the EU are talking more on slowing down rate increases. Talk about a tight rope.

Overall Market News

1) Overall Labor Market: Jobs numbers

ADP Numbers: Above expectations, again. This was led by Leisure and Hospitality, though a slowing is expected, but not happening yet. Manufacturing shed 36 K jobs. Another sector cooling. Wage growth shows softening and less than inflation.  Yet still positive.

BLS Jobs Report: Below expectations at 187,000 jobs created. And the past couple of months were revised lower. Digging into the numbers, the construct of this report includes + 280,000 jobs from estimates of how many new businesses formed, Leisure and hospitality added 17,000 (I said past couple months this number would start coming down), Healthcare and Education + 63,000.

Now the bigger numbers: Part-time workers increased 972,000 while full-time workers decreased 585,000. Multiple job holders increased 118,000.

Jobless Claims: Continue to be lower, after a month of tracking about 260,000 new claims per week. We dropped back to the 220 K ish level and today moving up to 240,000. Will Yellow Freight bankruptcy hurt future numbers. Will CVS and others begin to trickle in ?

Recent Residential Success Story:

Now Me to you:

Sometimes news is not what we want. Yet the key is how we adapt to the short-term realities. With real estate ownership comes landscaping, plumbing repairs and such. It is part of ownership. With it can come higher interest rates and its slowing effects. Today, new construction is a larger part of home sales, as current owners hold out longer. Higher interest rates and slowing economy work together to change the real estate profile.

What of increasing foreclosures? There will always be some. Yet nationwide, numbers continue decades long low’s. Good for homeowners. This does not mean things stop happening – death, divorce, job loss are all still alive and well. Perspective helps. Value increases of the past decade simply result in these planned or unplanned home sales. Key: they are done on the open market, often with money beyond the mortgage. This is truly a good sign of a dynamic market.

Price drops: Expectations for prices to drop – in my opinion – will not happen any time soon. A steady comment from home and investment property owners over the decades: “We wish we had bought more sooner”. Thus my point: In buying real estate, yesterday is the best day to buy, today is the second best and tomorrow the third. If you are ready and able, let’s get it done. Call me, I love to talk details and concept. Goal: enhance the decision you choose.

From an Economic Perspective report by the Federal Reserve Bank of Chicago: “Missing workers and dissing jobs since the pandemic” – have to love it. Here is a few fun quotes from the report:

Looking to payroll jobs in April 2023. If the unemployment rate had continued to decline – after the pandemic broke out – over the five years before, that would have generated 2.1 million payroll jobs. Similarly, under this assumption, a continued recovery in the participation cycle would have generated another 3.0 million payroll jobs.

And, What our results show is that, after the introduction of the vaccines in early 2021, the U.S. labor market has recovered very quickly to above where it was—relative to its long-run trend—at the beginning of 2020. This is a good sign for the resilience of the U.S. labor market. However, with little further room left for a cyclical adjustment, it also means that what is restraining growth in the labor market now is the long-run trend in labor supply, already known before the pandemic, and that is not expected to reverse in the coming decade.

In an nutshell, the talk about millions of jobs lost is not supported in fact.

Good News: The Breadth of Our Lending Possibilities:

We have the best financing options the market offers. Consider: 1) Veterans, 2) 1st time homebuyers with some fabulous brand new programs, 3) self – employed, and 4) investors with and without traditional income sources. Good News: The well prepared borrower. The lending world, being cautious with its money, loves the well prepared. Moreover, our lenders offer more options than pre Co-Vid. Call. Lets talk before you buy. Let’s talk today.

Our Focus: Market Disciplines – Now More than Ever

Do you have a desire to create ‘more’ wealth for tomorrow? How?

Rule # 1: Sacrificing today.

Live below your means. Not as easy as the words suggest, yet it can be accomplished. Spend less for your daily living than you bring in.

Rule # 2: Investing – Equities. I strongly suggest and recommend one maxes out on the retirement account contributions – each year. This deferred income, with tax benefits, builds for future years. Many such plans are offered, with many employer matching contributions. A great perk. Don’t leave it on the table, always being aware of how it’s invested. For many, a great way to keep your money working for you.

Rule # 3: Investing – Real Estate. Yes, yes and yes. Yes today. Yes yesterday. Yes tomorrow. Yellow Freight This is much the same as putting money aside in retirement accounts, while adding diversity. If your focus is in the “building for tomorrow’ stage”, now is the time to talk and prepare.

Divesting Assets: There are times in life where one needs to sell an investment, due to life’s uncertainties. It brings home the need for a carefully review of one’s investment inventory and see if they remain on-track to achieving the intended goals. One needs to flexible and willing to go to cash or find an alternative.

Good News: We not only set a plan in motion, we present the handling of the unexpected or even better – the significant issues of capital gains. More Good News: We have IRS approved tools and techniques to help keep your hard earned capital gains working for you – to keep them away from the taxman – federal and state – on a deferred basis. Such is the beauty of working with Mike Ryan and Associates. We are just a call away. Planning amongst friends.

Preparing to buying your next home: How about a “tool” that uses your old property, as collateral for the new home? How about tools whereby the current, “old” home payment, does not count against you, as you moved into the new. Want More Options: Call today.

Truly, our letters but scratch the surface of available options, alternatives, and potentials. We are ready and experienced in most every stage of life, to directly help you build a strong investment portfolio – regardless life’s ebb and flow. It is why a key approach to serving you, is to work with your unique view of life – today and tomorrow.

Because You Matter

Our letters are a guidepost to wisely buying, selling, or investing. We understand the importance of being patient and of good timing. Our hope is to address your questions and find real life, customized solutions. It is what I love about my work, especially the people-to-people exchange of thoughts and ideas. It proves the best way to discovery and address your needs and unique viewpoint. To this, we then add our complete set of helpful tools designed to complement the shared goal – your success, today and tomorrow. We are here for you.

Your dreams matter. Thank you for your trust and referrals. It’s appreciated.

Call me – Your success is my success.

Leave a Reply

Your email address will not be published. Required fields are marked *