Category: Uncategorized

Stocks surge following election results – It was a bazar week for both stocks and bonds. If you recall, stocks fell sharply after The FBI director reopened the email investigation as investors began to fear uncertainty as Hillary Clinton’s lead tightened. That week stocks dropped every day, as investors stated they were unsure of what a Trump presidency would mean for the economy. On Sunday when the FBI again revealed it found no new evidence that would change their earlier decision stock futures rebounded and stocks improved Monday and Tuesday, as all polling pointed to a win by Clinton. Polling organizations had her at a 82% favorite. As election results came in and it became clear that Trump was about to pull off a surprise victory stock futures dropped significantly. At one point Tuesday evening DOW futures were down 800 points. There was some speculation that the DOW could drop 2,000 points and then recover, mirroring what happened following the Brexit vote. That speculation was wrong and stocks opened just slightly down and ended the day Wednesday up sharply, followed by rallies Thursday and Friday. By week’s end the DOW gained about 1,000 points, closing at an all time high with the largest weekly gain since December 2011. The S&P recorded its largest weekly gain in two years. As markets surged, analysts, looking for reasons, attributed investor excitement to expectations of lower tax rates, less regulation ( especially a trim down of the Dodd Frank financial regulation), more government spending as Trump was proposing an infrastructure build up. That said, many analysts felt that the rally may be a little exaggerated, as most are. The DOW Jones Industrial Average closed the week at 18,847.66, up from 17,888.28 last Friday. The S&P 500 closed the week at 2,164.45, up from 2,058.18 last week. The NASDAQ closed the week at 5,237.11, up from last week’s close of 5,046.37.

U.S. Treasury Bond yields jump – As stocks surged investors sold off bonds. It’s common for money to move from the safety of low returns of bonds to more speculative higher returns of stocks when it’s felt stocks will rise. It’s also common for money to move back to the safety of bonds when it’s felt that stocks may fall. This week, as stocks had their best week in several years, bonds had their worst week as bond yields climbed to their highest rates in 3 years. Bond investors also felt that lower taxes may spur economic growth, but lead to higher deficits. They also expect higher government spending based on what has been proposed, may also improve the economy. Analysts feeling is that, while an improved economy is good it leads to higher inflation rates and would change The Fed’s plan and lead to more dramatic rate hikes. Some experts feel that all this speculation in both stocks and bonds are exaggerated. Other experts feel that rates will continue to move up, even if stocks settle down. We will have to wait and see over the coming weeks. The 10 year U.S. Treasury Bond yield closed the week at 2.15%, up from 1.79% last Friday. The 30-year U.S. Treasury Bond closed at 2.94%, down from 2.56% last week. Mortgage rates follow bond yields so we watch bond yields closely.

Mortgage rates rise to highest levels in 3 years – Rates surged as bond yields and stocks rose sharply following the election results. Rates on just about every mortgage product increased over 1/4%. By Friday the 30 year fixed rate was close to 4%. The Freddie Mac Primary Mortgage Survey which was released on November 10, 2016, showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.57%. The 15-year fixed average rate was 2.88%. The 5/1 ARM average rate was 2.88%. Unfortunately, this survey was last Wednesday, November 2 to Tuesday, November 8. Rates surged after the survey period, so rates will be about 1/4% higher in next week’s survey based on where we were at the end of the week.

California housing affordability unchanged in 3rd quarter – The California Association of Realtors reported that 31% of California households could afford to purchase a median priced home ($515,940). That was unchanged from the second quarter, but up from 29% in the 3rd quarter in 2015. Although prices were higher this year, wages were higher and interest rates were lower than last year in the 3rd quarter, which increased affordability. Rates look like they will be higher in the 4th quarter so it will be interesting to see where affordability goes. The affordability for a median priced condo of $418,230 was 40%.

Next week we will have California sales figures and prices for October. It will be interesting to see what the data says. We have felt a little slowing, but, that said, we are pretty spoiled by several great years! I’d expect that sluggishness we have felt to be just temporary based on inventory, affordability levels and what experts are saying.

Have a great weekend!

Syd

Below is the Westside Market Report for September 2016 detailing local real estate market statistics and including year-over-year data:

Westside

Below is the Conejo Valley Market Report for September 2016 detailing local real estate market statistics and including year-over-year data:

Conejo Valley

Below is the San Fernando Valley Market Report for September 2016 detailing local real estate market statistics and including year-over-year data:

San Fernando Valley

U.S. employers add 161,000 new jobs in October – Unemployment rate at 4.9% – The Bureau of Labor Statistics reported that the U.S. economy added a slightly less-than-expected 161,000 jobs in October and the unemployment rate stood at 4.9 percent as investors got to digest the final payrolls report before Tuesday’s presidential election. Economists surveyed by Reuters had expected payrolls to grow by 175,000, so this was slightly below expectations. Wages exceeded expectations with average hourly earnings climbing 10 cents, reflecting a 2.8 percent annualized increase, according to the report. A broader measure of unemployment, that includes those who have stopped looking for jobs and those working part-time for economic reasons, fell to 9.5 percent, the lowest level since April 2008.

Stocks down this week – Stocks have fallen every day this week as investors grow cautious on uncertainty over the upcoming election. Oil prices fell this week as a report showed oil inventories are surging. The jobs report was very positive, especially with respect to wages,  which have finally began to rise after years of stagnation. The Dow Jones Industrial Average closed the week at 17,888.28, down from 18,161.19 last Friday. The S&P 500 closed the week at 2,085.18, down from 2,126.42 last week. The NASDAQ closed the week at 5,046.37, down from last week’s close of 5,190.10.

U.S. Treasury Bond yields drop – While stocks dropped, investors moved money to bonds looking for safety. That caused bond yields to drop after several weeks of slight increases. The 10 year U.S. Treasury Bond yield closed the week at 1.79%, down from 1.86% last Friday. The 30-year U.S. Treasury Bond closed at 2.56%, down from 2.62% last week. Mortgage rates follow bond yields so we watch bond yields closely.

Mortgage rates slightly higher this week – The Freddie Mac Primary Mortgage Survey released on November 3, 2016 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.54%. The 15-year fixed average rate was 2.84%. The 5/1 ARM average rate was 2.87%. I’d expect rates to be slightly lower in next week’s survey based on where we were at the end of the week. 

Have a great weekend!
Syd

Stocks up slightly this week – Third quarter earnings season began with mixed results. Several tech companies beat earnings expectations while several very large companies reported earnings that were below expectations. As more companies report the market may move depending on the profit levels. All in all it was a pretty lackluster week. The Dow Jones Industrial Average closed the week at 18,145.71, up from 18,138.38 last Friday. The S&P 500 closed the week at 2,141.16, up from 2,132.98 last week. The NASDAQ closed the week at 5,257.40, up from last week’s close of 5,214.16.

U.S. Treasury Bond yields drop this week – The 10 year U.S. Treasury Bond yield closed the week at 1.74%, down from 1.80% last Friday. The 30-year U.S. Treasury Bond closed at 2.48%, down from 2.55% last week. Mortgage rates follow bond yields so we watch bond yields closely.

Mortgage rates up just slightly this week – The Freddie Mac Primary Mortgage Survey released on October 20 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.52%. The 15-year fixed average rate was 2.79%. The 5/1 ARM average rate was 2.85%. I’d expect to see rates just slightly lower next week based on where we were at the end of the week. 

California existing home sales up in September – The California Association of Realtors reported that existing single family home sales totaled 425,680 in September on a seasonally annualized rate, up 1.8% from August’s rate and up 0.8% from last September. This marked the first year over year increase in 7 months as extremely low inventory has led to fewer sales. 

California’s median price paid for an existing home up 6.1% – Year over year the median price paid for a single family home increased 6.1% in September to $514,320 according to The California Association of Realtors. The median price in September 2015 was $494,670. 

Homes on the market remain near all time low levels – C.A.R. also reported that the unsold inventory index in September showed a 3.5 month supply of homes on the market. A “normal” market has a 6 1/2 month supply of homes. I’d expect prices to continue to rise until the inventory level gets closer to normal levels.  

U.S. existing home sales up in September – The National Association of Realtors reported that total existing home sales, which include single family detached homes, town-homes, condos, and co-ops, increased 3.2% in September from August levels. Sales year over year were up just 0.6% from last September, but The September figure represented a nice rebound after a disappointing July and August sales level. One key figure in the report was an increase in first time buyers who accounted for 34% of the total sales. That was a 4 year high. Distressed sales accounted for just 4% of sales which is a new low according to N.A.R. The median price for an existing home nationwide increased 5.6% from last September as low inventory pushed prices higher.

Hope you have a great weekend!

Syd

Stocks down this week as companies begin to report 3rd quarter profits – The week began with disappointing 3rd quarter profits from a few early reporting companies. Alcoa and others shocked investors with weak results which caused markets to sell off sharply. By the end of the week Citi and JP Morgan Chase reported higher than expected profits which caused stocks to make up some of the week’s loses, and gave hope to investors that, as more companies report, profits may be better than they felt at the beginning of the week. Other news this week was that: Oil hit a high for the year at over $51 a barrel. Minutes released from the September Fed meeting has investors feeling that The Federal Reserve will raise rates at the December meeting. A drop in Chinese manufacturing has caused renewed concerns on the strength of China’s economy. The Dow Jones Industrial Average closed the week at 18,138.38% down from 18,240.49 last Friday. The S&P 500 closed the week at 2,132.98%, down from 2,153.74 last week. The NASDAQ closed the week at 5,214.16, down from last week’s close of 5,291.40.

U.S. Treasury Bond yields higher this week – Fears of higher rates has pushed bonds up again this week. The 10 year U.S. Treasury Bond yield closed the week at 1.80% up from 1.73% last Friday. The 30-year U.S. Treasury Bond closed at 2.55% up from 2.46% last week. Mortgage rates follow bond yields so we watch bond yields closely.

Mortgage rates edge up this week – The Freddie Mac Primary Mortgage Survey released on October 13 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.47%. The 15-year fixed average rate was 2.76%. The 5/1 ARM average rate was 2.82%. I’d expect to see rates a little higher again next week based on where we were at the end of the week. 

China tops list of foreign buyers for fourth year – According to a survey from The National Association of Realtors, China ranked first among foreign nationals purchasing property in the U.S. for the fourth straight year. U.S. Home sales totaled $27.3 billion. That exceeded the total of the next 4 countries combined. 

September home sales figures will be released next week by The California Association of Realtors. Pending sales were up slightly in August. If those pull through to closing closed sales should remain strong. We shall see next week. 

Have a great weekend!

U.S. Employers add 156,000 jobs in September – The Bureau of Labor Statistics reported that the total nonfarm payroll employment increased by 156,000 in September, a decent gain but slightly below market expectations. This year, job gains have averaged 178,000 per month, down from last year’s pace of 229,000. The nation’s unemployment rate was 5.0%, up from 4.9% in August, as more workers entered the job search. Average hourly earnings increased by 6 cents to $25.79, after just a two-cent increase in August. Year over year, average hourly earnings have risen by 2.6%.

Stocks down for the week – Stocks fell this week on fears of higher interest rates. Stronger than expected auto sales and manufacturing data caused investors, once again, to fear a rate hike by the Federal Reserve. The jobs report showed 156,000 new jobs added in September which was a little below expectations, and a 2.6% rise in wages over last September, which was at expectations. This also has investors believing that a rate hike is coming soon. The Dow Jones Industrial Average closed the week at 18,240.49, down from 18,308.15 last Friday. The S&P 500 closed the week at 2,153.74, down from 2,168.27 last week. The NASDAQ closed the week at 5,292.40, down from last week’s close of 5,312.00.

U.S. Treasury Bond yields higher this week – Fears of higher rates has pushed bonds up over the last month. The 10 year U.S. Treasury Bond yield closed the week at 1.73%, up from 1.60% last Friday. The 30-year U.S. Treasury Bond closed at 2.46%, up from 2.33% last week. Mortgage rates follow bond yields so we watch bond yields closely.

Mortgage rates unchanged this week – The Freddie Mac Primary Mortgage Survey released on October 6 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.42%. The 15-year fixed average rate was 2.72%. The 5/1 ARM average rate was 2.80%. I’d expect to see rates a little higher next week based on where we were at the end of the week.