Economic Update For The Month Ending January 31, 2021

 

Stock markets hit record highs before dropping at the end of January to end the month lower – Stock market indexes reached record-high levels in January, only to lose all of their gains in the last week of the month. Markets suffered their worst week since October as investors digested comments by the Fed, a disappointing fourth-quarter GDP report, increasing job losses, and a pullback in consumer spending. The Fed shocked investors early in the week when they made comments suggesting that their key overnight rates would remain at or near zero percent for an extended period which could last years after the pandemic is over. This suggested that the Fed has data that the impact of the pandemic on the economy would last longer than investors believed. On Friday a preliminary GDP report revealed that the economy contracted for the first time since the financial crisis, and suffered its largest yearly contraction since 1946. Retail and service sales reports showed that consumers had pulled back on purchases for goods and services in the fourth quarter, reversing a historic 33% quarter-over-quarter increase in the third quarter. Business investment, and residential real estate were sectors that surged in 2020, according to the GDP report. Job losses also increased in December and January as much of the country instituted more restrictions on business, including some states re-issuing stay-at-home orders. Fortunately, it’s widely believed that the $900 billion in stimulus from the CARES Act 2 that will be distributed in the first quarter of 2021 will increase consumer spending and grow the economy. Investors remain optimistic and expect the effects of the stimulus, the drop in COVID cases nationwide which has led to a loosening of restrictions and reopenings, increased vaccine disbursement, and future stimulus to continue to revive the economy, and boost hiring. The Dow Jones Industrial Average ended the month at 29,982.62, down 2.0% from 30,606.48 on December 31. The S&P 500 closed the month at 3,714.24, down 1.1% from 3,230.78 at the end of December. The NASDAQ closed the month at 13,079.69, up 1.4% from 12,888.28 on December 31, 2020.

U.S. Treasury Bond Yields dropped sharply in 2020 – The 10-year U.S. treasury bond yield closed the year at 1.11%, up from 0.93% On December 31, 2019. The 30-year treasury yield ended the year at 1.87%, up from 1.65% on Dec. 31, 2019. We watch bond yields because mortgage rates follow treasury bonds.

The U.S. Economy lost 140,000 jobs in December – Jobs data is reported on the first Friday of every month. This is the data for December. The Department of Labor Statistics reported that 140,000 non-farm jobs were lost in December. This marked the first month of net job losses since April. As COVID-19 cases continue to spike, most states and local governments have entered more restrictive shutdowns. This has caused another round of layoffs. The unemployment rate in December was 6.7%.

Mortgage Rates – The January 28, 2021, Freddie Mac Primary Mortgage Survey reported that the 30 year fixed rate mortgage average was 2.73%, up from 2.67% on December 28, 2020. The 15-year fixed was 2.20%, up from 2.17% last month. The 5-year ARM was 2.80%, up from 2.71% at the end of December.

Home sales data is reported on the third week of each month for the previous month. These are December’s results.

2020 marked the highest number of U.S. existing-home sales since 2006 – The National Association of Realtors reported that the number of homes sold in December was 22.2% above the number of homes sold last December. Despite the pandemic, 2020 marked the highest number of homes sold since 2006. The median price paid for a home in December was $309,800, up 12.9% from $274,500 in December 2019. With new listings surging, but not able to keep pace with buyer demand, inventory shrunk to record low housing supplies in 2020. There was just a 1.9 month supply of homes for sale in December, down from a 3.0 month supply one year ago.

California existing home sales – The California Association of Realtors reported that existing, single-family home sales totaled 509,750 on an annualized basis in December. That represented a year-over-year increase of 28% from the 398,370 annualized rate of homes sold in December 2019. It was the highest number of monthly home sales in 15 years, and the most homes ever sold in December. Home sales are homes that closed escrow. Pending home sales are new contracts signed. Those are at near-record levels as well. For the entire year, 411,870 homes sold, up 3.5% from 397,960 homes sold in 2019. That number is pretty incredible considering home sales were down almost 30% at the end of June. There was a record number of sales in the second half of the year. The median price paid for a home in California was $717,930, up 16.8% from the median price of $659,380 last December. Inventory levels were lower than one year ago. There was just a 1.3-month supply of homes for sale in December, down from a 2.5-month supply one year ago. The current supply of homes was almost unchanged from September and October, as a record number of new listings were taken in November but sold quickly. Below please find a graph of regional statistics for Southern California.

Home Tips: Tips to Make Your Home Look More Expensive

Create a home that looks straight out of a luxury magazine with these home decor tips on a budget!

Tip #1: Create DIY Built-In Structures

The way to make any built-in structure look more expensive is for it to fit in your space perfectly. From bookshelves to kitchen cabinets, try expanding these built-ins from floor to ceiling or counter to ceiling.

Tip #2: Try a Backsplash

A backsplash is a great affordable home decor idea for a kitchen, bathroom, or laundry room without breaking the bank. If tiling a backsplash is too intimidating, consider creating an accent wall with bright colored paint.

Tip #3: Light Up the Room

Natural lighting and source lighting is very important to a room. Make it a point to not block windows, and also be sure to add table and floor lamps throughout your space for a huge statement. Big box stores sell light fixtures for about $50, but the look of a bigger room is priceless. Any pricey light fixtures might be better suited for your wedding registry.a

Things to Do: Home Organization

We have almost finished off the first month of the new year. Time flew! If you are looking to get organized at home over the weekend, check out these tips of can-do tasks to get organized!

Create a Command Station

Stick adhesive pockets to the inside of your spice cabinet to keep all of your grocery lists, coupons, and recipes in one spot. Add a pen loop, so you don’t have to go searching to jot something down.

Add a Towel Rack to the Linen Closet

They’re not just for bathrooms. An over-the-door hanger creates out-of-sight storage space for extra tablecloths, throws, or towels.

Invest in Drawer Organizers

Though it’s easy to think “out of sight, out of mind,” a messy desk drawer does not help your productivity. Mix and match acrylic dividers so your pens, pencils, and paper clips all have a spot to live.

Teach the “One In, One Out” Rule

Kids need to understand that storage is finite, and that continuing to collect eventually leads to clutter and chaos. When they get a new toy or new jeans, send an old one to the donation bin.

Streaming: January Top Picks

Check out some of what’s streaming on Netflix, HBO Max, Disney+ and more this month!

Flack

Where to Watch: Amazon Prime

Bad behavior calls for great publicists. Ever wonder what the real story is behind those celebrity gossip columns? This series has all the dirt. Robyn, played by Academy Award winner Anna Paquin, and other publicists are tasked to make the best of their celebrity clients’ terrible decisions.

Where to Watch: Netflix
Shia LeBeouf and Vanessa Kirby star in this film about a heartbreaking home birth that leaves a woman grappling with the profound emotional fallout, isolated from her partner and family by a chasm of grief.

LA & Valley Eats: Local Restaurants

This week we are highlighting restaurants that have been open and serving delicious meals this past year. Each of these businesses are open for takeout to enjoy and devour!

 

Barbie-Q

15928 Ventura Blvd, Encino, CA 91436
This is the place to eat well in the San Fernando Valley. Owner Fortune Southern’s new Encino restaurant, formerly a food truck, turns out some of the Valley’s best comfort food. From Polish boy sandwiches loaded with fries to smoked meats and more, you can’t go wrong.


Medan Kitchen

8518 Valley Blvd STE 102, Rosemead, CA 91770
Medan Kitchen is a SGV gem, the kind of place that only LA could produce. 75-year-old Siu Chen works a menu of Indonesian home recipes, making this easily one of greater LA’s most delicious openings of the past year.

 

Bootleg Pizza 

5504 W Pico Blvd, Los Angeles, CA 90019
Bootleg Pizza’s long journey has taken owner Kyle Lambert from the food truck circuit to a new storefront on Pico Boulevard in the Mid-City neighborhood. Order in advance or walk in (safely) for a slice of some of LA’s hottest pizza.


Ospi

2025 Pacific Ave, Venice, CA 90291
Pasta lovers have a new place to dine in Venice, CA. Ospi has some of the best housemade pasta anywhere in LA right now, along with unique pizzas and lots of wine for sale.


Adrift Burger Bar 

1025 Abbot Kinney Blvd Venice, CA 90291
Chef David Myers takeaway casual spot plays to his long love of burgers. Sit back and relax as Adrift Burger Bar takes you on a classic diner-esque ride. Hot Tip: don’t forget to add one of Chef David’s insanely delicious shakes with your burger!

Home Tips: Going Green

Looking to “green” your home? Check out these simple ways to tackle energy usage (and the subsequent power bills) without making room for a single geothermal heat pump.

Repair leaky faucets

It’s the little things that get you. So before you dismiss that drip-drip-drip, consider that the average leaky faucet (about 10 drips per minute) ends up wasting roughly 350 gallons per year. That’s about $20 every month extra on your bill. But multiple cracks in the plumbing can wind up costing several times that. Similarly, a leaking toilet can add about $150 to your monthly water bill. Given this, calling the plumber starts to sound like the cheaper, more appealing option.

Throw some shade

Whether it’s baking your face on the beach or streaming in through your windows, manage your sunlight exposure. When it’s summer, draw the drapes and snap shut the blinds, especially when nobody is home. (The same logic applies in the winter when adding curtains can ensure heat doesn’t escape.) When you have the sunlight situation under control, caulk the windows and survey for drafts. If you feel one, it’s likely that cracks around the frame are to blame.

Pull the plug

All appliances generate heat, so keep them off until needed. For example, don’t run the dryer or dishwasher until after dark, preferably overnight. And if you want to cook, the grill on your patio or in your yard is preferable to the kitchen stove. (Cooling and heating are responsible for about half of a home’s energy use, followed by the water heater, the washer and dryer, and the lights.) Also, consider pulling the plugs on the notorious, so-called “vampire electronics,” which continue to gobble power even when seemingly switched off. These include everything from laptops and routers to gaming consoles and microwaves too, of course, televisions.

Hang them out to dry

No one is suggesting you break out your great-great-grandma’s washboard and start scrubbing away, but how you clean your clothes contributes greatly to how much power and water your home uses. (The washer and dryer combined account for about 13% of a home’s energy consumption.) Whenever possible, wash your clothes in cold water and hang them to dry, avoiding the dryer altogether. That simple choice can both reduce your bills and bolster the environment. Similarly, try to only wash full loads to maximize water usage.

Plant south-facing tree

This is an obvious one: planting trees can help make your property more environmentally friendly. Just make sure to plant them on the south side. The leafy barrier will keep your home cool during the summer by providing a barrier to direct sunlight. And during the winter, it will let your home’s interior retain warmth. Plus, your landscaping will look better for it.

 

Things to Do at Home: Creative Edition

It’s not all bad, being home, once you start realizing all the fulfilling and productive things to be done there. And we’re in it together! So I put together this list of fruitful and fun activities to do at home to spread the positivity around.

Play Chess

If anything can motivate us to learn how to play chess and truly appreciate it, it’s Netflix’s new series, The Queen’s Gambit. First, watch the show, then study the game if you don’t already know how to play. If that sounds too ambitious right one or don’t have anyone to practice with, try playing solitaire instead.

Bring Out Your Art Supplies

Whether you like working with clay (try your hand at a stop motion video!), water-coloring, or drawing, set up a little corner to start practicing art again. Crafting and getting creative is such a great way to get out of your head.

Work Your Way Through a Cookbook

If you’re someone who collects cookbooks but only ever really makes one of the recipes or you’ve never actually even made a recipe from them and simply use them as coffee table decor, this is the perfect opportunity to dive in. It’ll make cooking (and eating) so much more enjoyable. Plan out themed dinners to spice it up even more!

Learn a New Language

If you were pro in a foreign language in high school but have since lost your magic or you’re a first-timer, now is a good time to download a language app like Memrise or Duolingo and start practicing. Or, if you’re not interested in learning a new language, sign up for another kind of online class.

LA & Valley Eats: Local Cuisine From Around the World

Stuck at home and looking for something tasty to eat? Satisfy your tastebuds this week with cuisine inspired by countries around the world.

SoCalo

1920 Santa Monica Blvd, Santa Monica, CA 90404

Located within Santa Monica’s Gateway Hotel, Socalo is a beachy, California canteen and Mexican pub from award-winning chef/owners Susan Feniger and Mary Sue Milliken.

Socalo serves conscientiously-sourced, seasonal SoCal Mexican fare for Brunch, Lunch, and Dinner. Open 11:30am to 8pm for takeout, curbside pickup, delivery, and family meal kits. Place your order online, in person, or by phone 310.451.1655

 

Parks BBQ

955 S. Vermont Ave. , Los Angeles, CA 90006

Located in the heart of Los Angeles’ Korea town district, Park’s BBQ is considered by many to be the best of the best. Chef Jenee and Park’s have been given numerous awards and have been featured in countless media. Her traditional Korean cuisine married with her inventive view on flavors has pushed Korean cuisine to new heights.

 

Night + Market Song

9043 Sunset Blvd, West Hollywood, CA 90069

The vibe at NIGHT + MARKET is California chill meets Bangkok frenzy fueled by natural wine. The menu is likewise a mash-up authentic, old school Thai with some ‘90s Asian-fusion influences that Chef Kris is proud to take ownership of.

 

Ca Del Sol

4100 Cahuenga Blvd. Toluca Lake, CA 91602

With Chef Costella’s attention to detail, gracious manner, and fine Northern Italian cuisine, Ca’Del Sole became an instant success after opening its doors. The comfortable, authentic Venetian country inn setting attracted the entertainment crowd and Ca’Del Sole quickly became the hot spot for Hollywood’s elite.

The Great Greek

13362 Ventura Blvd, Sherman Oaks, CA 91423

This photo-lined taverna plates generous portions of Greek delicacies in a lively atmosphere. Check out their take out menu and order a few things for the entire family to share!

Howlin’ Ray’s

727 N Broadway #128, Los Angeles, CA 90012

Yes, there will be a line and yes, Howlin’ Ray’s is worth the wait! Tucked in Chinatown’s Far East Plaza, this hole-in-the-wall fast-casual eatery dishes out LA’s hottest Nashville chicken, served Sando style, as a quarter or half-bird, or your choice of tenders or wings. Customize with caution, and edge on the safe side when asked for your preferred level of heat.

Streaming: Real Estate Related Reality TV Shows

With so much time spent inside, people had a chance to really focus on their homes and make them as functional, comfortable, and beautiful as can be. So it’s a good thing we have so many great real estate reality shows on HGTV, Netflix, Bravo, and beyond to keep us not only entertained but also inspired with tips to take our living spaces to the next level.

Self-Made Mansions

While “Fresh Starter” focuses on starter homes, “Self-Made Mansions” is all about luxury living. This new HGTV series stars Clinton Kelly (from “What Not To Wear”), who helps self-made millionaires find the perfect home. It’s a must-watch for those looking for high-end real estate, but it’s also perfect for those who just like to dream.

Unfinished Business

Have you ever started a home project and failed to finish it? HGTV’s “Unfinished Business” is all about those half done projects. In the series, contractor Tom Reber will help families finally complete their handy home undertakings—timely inspiration for viewers dragging their feet on those quarantine upgrades they swear they’ll do someday.

My Lottery Dream Home International

If you won millions in the lottery, you’d buy a palatial mansion abroad, right? In HGTV’s “My Lottery Dream Home International,” British interior designer Laurence Llewelyn-Bowen will help lottery winners find their dream home in Europe. It’s perfect for those fantasizing about an overseas escape in 2021.

Cabin Crew

Have you ever dreamed of living in a cozy cabin? Then you’ll dig HGTV’s “Cabin Crew,” where husband and wife Ben and Loana Sargent transform old Vermont cabins and cottages into fabulous dream homes. It’s a must-see for anyone who wants a little house in the woods that’s decked out with all the luxuries of modern life.

Economic update for the week ending January 16, 2021

Stock markets dropped as COVID-19 related job losses surge – Stock markets fell off their all-time highs last week as investors feared that the economic business closures may last longer than expected due to what appears to be an out of control spread of COVID-19, and a vaccination process that has failed to live up to the numbers expected. Stocks were hit even harder on Thursday after it was reported that initial unemployment claims rose sharply last week. They were over 1 million for the first time since July.   The Dow Jones Industrial Average closed the week at 30,814.26, down 0.9% from 31,097.97 last week. It is up 0.7% year-to-date. The S&P 500 closed the week at 3,768.25, down 1.5% from 3,824.68 last week. It is up 0.3% year-to-date. The NASDAQ closed the week at 12,998.50, down 1.5% from 13,201.98 last week. It is up 0.9% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 1.11%, almost unchanged from 1.13% last week. The 30-year treasury bond yield ended the week at 1.85%, almost unchanged from 1.87% last week. We watch bond yields because mortgage rates often follow treasury bond yields. 

Mortgage rates – The January 14, 2021 Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate was 2.79%, up from 2.65% last week. The 15-year fixed was 2.23%, up from 2.16% last week. The 5-year ARM was 3.12%, up from 2.75% last week. Unfortunately, rates increased late in the week. Next week’s mortgage rates will be higher.

California existing home sales – The California Association of Realtors reported that existing, single-family home sales totaled 509,750 on an annualized basis in December. That represented a year-over-year increase of 28% from the 398,370 annualized rate of homes sold in December 2019. It was the highest number of monthly home sales in 15 years, and most homes ever sold in December. Home sales are homes that closed escrow. Pending home sales are new contracts signed. Those are at near-record levels as well. For the entire year of 411,870 homes sold, up 3.5% from 397,960 homes sold in 2019. That number is pretty incredible considering home sales were down almost 30% at the end of June. There was a record number of sales in the second half of the year. The median price paid for a home in California was $717,930, up 16.8% from the median price of $659,380 last December. Inventory levels were lower than one year ago. There was just a 1.3-month supply of homes for sale in December, down from a 2.5-month supply one year ago. The current supply of homes was almost unchanged from September and October, as a record number of new listings were taken in November but sold quickly. Below please find a graph of regional statistics for Southern California.